The artificial intelligence pivot that bitcoin miners had counted on as a way out is now being tested. Shares of miners that moved into the data center business fell after the resignation of Nvidia Chief Executive Jensen Huang shook AI-related stocks. Compounding the strain, bitcoin itself dropped sharply, raising concerns that further sales of miners' coin holdings to raise cash could add to downward pressure across the cryptocurrency market.
Shares of major bitcoin miners fell on the U.S. market on the 12th, according to industry sources on the 14th. IREN closed at $19.48, down 6.53% from the previous session, while MARA Holdings fell 6.01% to $7.20. Riot Platforms dropped 2.46%, and TeraWulf and Core Scientific declined 2.40% and 1.30%, respectively.
Nvidia shares also fell 4.34% that day in the wake of Huang's resignation. AI data center operators CoreWeave and Nebius dropped 6.86% and 16.84%, respectively. Reuters said the leadership vacuum at Nvidia is deepening concerns about funding conditions in the AI industry.
Miners are exposed to the AI industry because they have been expanding into data centers. Using the power supply and sites they secured for mining, they are building AI data centers and either leasing the facilities to companies or running servers themselves. The strategy is meant to reduce their dependence on bitcoin prices, but it also leaves them exposed to the investment plans of AI companies and to demand for data center capacity.
The problem is the enormous upfront capital that building AI data centers requires. Core Scientific posted $215.4 million in third-quarter revenue from data center leasing and operations, but spent $985.1 million on capital expenditures over the same period. Because the business model involves building a data center first and collecting payments over a long period, securing early-stage funding is critical. If investor sentiment toward the AI industry weakens and outside financing becomes harder to obtain, the burden of expanding the business could grow.
Some miners are already selling bitcoin holdings to raise capital. Riot sold 20,264 bitcoin between January and September this year, raising about $1.5 billion. The proceeds went mainly to data center development and debt repayment. The company said it expects to sell most of the bitcoin it mines going forward.
MARA Holdings said in a shareholder letter released on the 9th that it had sold 13,597 bitcoin for about $1.1 billion since October. Of that, $750 million was used to repay bitcoin-backed loans. The company plans to continue funding AI infrastructure investment and bond repayments through bitcoin sales.
Falling bitcoin prices are adding to the funding strain. Bitcoin stood at $69,193.19 at 7:30 p.m. the previous day, down 5.82% from a day earlier, according to global cryptocurrency data site CoinMarketCap. When prices fall, selling the same quantity of bitcoin yields less cash — meaning miners may have to sell more coins to cover data center investment and debt repayment.
Further sales by miners could feed a cycle that pushes bitcoin prices lower still. Funding needs for AI data center investment keep rising, and if bitcoin prices fall at the same time, the volume of coins coming to market could increase. Financial information outlet MarketScreener on the 12th pointed to the heavy upfront costs of AI data centers and the time it takes for revenue to materialize as drivers of additional selling pressure. "The shift by miners into AI could increase selling pressure in the bitcoin market in the short term," it said.
Original reporting by Do Ye-ri for Seoul Economic Daily.
AI-translated from Korean. Quotes from foreign sources are based on Korean-language reports and may not reflect exact original wording.
Watch · Seoul Economic Daily
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