Key takeaways

  • Bitcoin mining infrastructure stocks plunged 35% during October
  • VanEck says long-term AI contracts remain intact
  • US electricity shortages could increase existing infrastructure valuations

Bitcoin mining companies expanding into artificial intelligence infrastructure suffered an average 35% stock-price collapse in October, but investment manager VanEck argues that investors may be overlooking the value of their electricity assets.

In a November 4 research report, VanEck analysts Griffin MacMaster and Matthew Sigel said the selloff reflected rising financing costs and broader concerns about AI infrastructure debt rather than deteriorating customer demand.

The firm's tracked group includes companies such as Cipher Mining, Hut 8, TeraWulf, Core Scientific and Riot Platforms. Despite the sharp decline, VanEck found no canceled signed leases among the publicly traded companies it analyzed.

Bitcoin Miners Lose 35% as AI Financing Fears Spread

The October selloff followed rising Treasury yields, inflation concerns and deteriorating financing conditions across the artificial intelligence sector.

VanEck noted that CoreWeave's debt yields approached 15%, compared with bond coupons below approximately 10%, raising concerns about the cost of funding additional AI computing infrastructure.

However, the report argues that investors are treating two fundamentally different business models as if they carry identical risks.

GPU rental companies such as CoreWeave purchase expensive processors and rent computing capacity to customers, often through contracts lasting approximately two to five years.

By comparison, Bitcoin miners transitioning into AI infrastructure frequently provide electricity connections, land and data center buildings under leases lasting 10–20 years.

That distinction has become increasingly important as Bitcoin mining stocks move away from their traditional correlation with cryptocurrency prices.

VanEck Says Electricity Could Be More Valuable Than GPUs

VanEck's central argument is that access to electricity, rather than computing hardware, may become the biggest constraint on AI infrastructure growth.

Morgan Stanley projects a 38-gigawatt US data center power shortfall through 2028, while only approximately 2% of the 2,290 gigawatts in the US electricity interconnection queue reached commercial operation during 2025.

That shortage could strengthen the position of companies already operating large, grid-connected facilities.

Bitcoin miners have increasingly pursued this opportunity through major AI contracts, including TeraWulf's approximately $19 billion agreement tied to artificial intelligence infrastructure.

VanEck estimates that the tracked companies trade at roughly half the projected 2028 enterprise-value-to-EBITDA multiple of traditional data center real estate investment trusts.

The firm believes investors may be assigning insufficient value to the existing infrastructure and long-term contracted cash flows.

Can Bitcoin Mining Stocks Recover?

The bullish argument does not eliminate financing risks.

VanEck estimates that additional AI infrastructure projects could require approximately $600 million to $3.2 billion in equity financing during 2027–2028, potentially diluting existing shareholders.

Political resistance to data center construction also remains a concern. Earlier restrictions on TeraWulf's expansion demonstrated how permitting decisions can delay projects despite strong demand.

Meanwhile, companies pursuing both GPU ownership and infrastructure leasing may face greater financing exposure than those focused exclusively on powered facilities.

The industry's earlier AI-driven stock rallies reflected investor enthusiasm for the transition away from traditional Bitcoin mining.

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Ethan Mercer

Ethan Mercer is a financial journalist covering crypto, stocks, and the global economy. He studied Economics and Finance and later moved into market reporting, with a particular interest in Bitcoin, equities, monetary policy, and investor sentiment. His work focuses on explaining daily market moves and the broader trends behind them.

https://coinpaper.com/38383/bitcoin-mining-stocks-crash-35-but-van-eck-says-ai-power-assets-are-being-mispriced