The founder of Capriole Investments has warned that the AI pivot in Bitcoin mining could see mining revenues fall to 30% within 2-3 years.
Bitcoin mining companies are rapidly moving towards artificial intelligence
In new mail On X, Charles Edwards, founder of Capriole Investments, talked about the transformation the Bitcoin mining industry is going through. Several major public mining companies have announced… Pivotal artificial intelligence To some extent at least.
Below is a table compiling data related to general mining in the process of transitioning towards AI computing business.
Looks like revenue from AI is still not that high for most miners | Source: @caprioleio on X
As can be seen, all of these Bitcoin mining companies have issued statements announcing their move towards artificial intelligence. However, while these companies are expanding in the industry, most of them have not started making significant gains profit Of work so far. On average, AI makes up 13% of major mining companies’ revenues, leaving Bitcoin as the majority income source for these companies.
However, this may not last for long, if the goals announced by the miners are achieved. From the table, it appears that most of these companies are targeting AI revenues to cover the majority of their income by 2027-2028. “On average, current Bitcoin revenues are expected to decline From 90% to 30% only In the next 2-3 years! Edwards noted.
Companies targeting complete or near-complete transformation are also the companies that have seen their stocks perform the best in the market. “Those with more than 80% AI share of revenue goals saw their shares rise higher more than 500% “Those who targeted less than 60% of AI revenue saw this on average,” the analyst explained. 1/10 growthwith many of them having negative returns for two years.
Bitcoin is a cryptocurrency secured by its mining network, but given the pivot made by the main miners, the power allocation towards the network appears to be weakening.
In terms of real-world impact, it is unclear whether the AI push has influenced the network’s trajectory yet. According to data from Blockchain.com,Bitcoin Hashrata measure of the total computing power connected to the blockchain, has declined over the past few months. This may make it seem as if the recent pivot toward the high-performance computing business is behind the downtrend, but that may just be a result of Bitcoin’s falling price.
The 7-day average value of the Hashrate has gone down in recent months | Source: Blockchain.com
However, even if AI hasn’t directly impacted Hashrate yet, revenue projections suggest the shift could happen soon, and it’s a notable shift at that. “Bitcoin was famous for having the largest computing network in the world,” Edwards said. “It is now collapsing into AI at a record pace.”
Bitcoin price
At the time of writing, Bitcoin is trading around $76,200, up 5.5% in the past seven days.
The price of the cryptocurrency has risen recently | Source: BTCUSDT on TradingView
Featured image by Dall-E, chart from TradingView.com
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