Bitcoin Miners Diversifying into AI Data Centers

According to a Monday note from Bernstein, Bitcoin miners are increasingly diversifying into AI data centers to create sustainable business models and attract institutional investors.

Several major miners, such as Marathon Digital (NASDAQ:MARA) and Core Scientific Inc (NASDAQ:CORZ), have recently secured substantial funding through convertible notes, each following unique strategies.

Marathon Digital raised $300 million with plans to acquire more Bitcoin, inspired by MicroStrategy’s use of long-term convertible notes to acquire Bitcoin for corporate treasury purposes. Marathon’s notes come with a 25% premium and a 2.125% coupon, maturing in 2031.

In contrast, Core Scientific secured $400 million at a 3% interest rate over five years to pay off high-cost debt and acquire AI-focused data centers.

Bernstein notes a growing divide among Bitcoin miners: some are committed to Bitcoin mining, while others are shifting to AI data centers, a strategy termed the “Mullet strategy,” which prioritizes AI while maintaining Bitcoin mining operations.

The note questions whether all Bitcoin miners should transition to AI data centers, referencing strong institutional interest in miners adopting AI and High-Performance Computing (HPC) strategies. This shift could lead to more sustainable economic models as the AI industry attracts significant investments.

U.S.-listed Bitcoin miners benefit from access to deeper capital markets, giving them a competitive edge over unlisted and non-U.S. miners, reinforcing Bernstein’s long-standing view that U.S. listed miners will act as market consolidators.

The analysts also comment on the upcoming U.S. elections, pointing to Polymarket trends indicating a tight race between Trump and Harris, which is contributing to a volatile yet range-bound Bitcoin and crypto market. Bernstein believes a Republican victory, particularly one by Trump, would likely have a positive effect on the crypto market.