In today’s issue, Ben Harper From Luxor technology Provides an update on what’s going on with bitcoin mining this year.
Then, then, Colin Harper From Blockspace Media answers questions about the topic of mining and AI to Ask and Expert.
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Bitcoin mining has changed – it’s no longer about price
The thesis of Bitcoin’s mining investment became simple – miners develop when the price of Bitcoin sinks, and when it collapses, they suffer. But in 2024, that equation changed. Bitcoin ETFs, hashrate markets and AI are starting to reshape the industry, reducing the hopes of miners to the price of bitcoin. Here’s why mining is no longer just a bet on Bitcoin, and what it means for investors.
2024: Bitcoin’s mining year deviates from the price of Bitcoin
In 2023, Bitcoin mining stocks act like a high-beta proxy for bitcoin. But in 2024, this pattern was damaged. Despite the reach of Bitcoin in new all-time highs, mining stocks have failed to capture their previous peaks.
The table below describes the shift of the touch between Hashrate index’s crypto mining index and Bitcoin price, comparison of weekly prices and returns before and during 2024:
Source: Hashrate Index, June 2020 – December 2024
Takeaway is clear: Bitcoin mining stocks are no longer a straightforward stake in bitcoin price. The difference -this varies comes from the four major trends that shape the sector:
1. Adoption of institutional bitcoin: the arrival of spot etf
The launch of the Bitcoin ETFS spot in January 2024 again issued institutional investment in Bitcoin. By ETFs that gained more than 1.3 million BTCs and exceeds $ 100 billion in possessions under management, the appeal of mining stocks as a bitcoin proxy proxy. Instead of using miners as an indirect exposure, capital flows directly into Bitcoin by ETFsIntroduction to the transfer of the dynamic market.
2. The Hilving and The AfterMath: A Squeeze on Miner Economics
The fourth division of Bitcoin in April 2024 cut the block subsidy from 6.25 BTC to 3.125 BTC per block, slowing down the main source of miners in half. Historically, the posting of bitcoin prices of bitcoin have helped offset lower rewards, but at this time, miners face further headwinds:
- Record-high network difficulty. Increasing competition has reduced individual miner rewards.
- Falling transaction fees. The lower demand for blockspace has reduced an important second income stream.
- Falling hashprice. Despite the Bitcoin rally, Hashprice, an all-in measure of mining income per unit of calculation (i.e., hashrate), has fallen by 75%.
As Bitcoin prices rise 120% throughout the year, miners struggle to maintain profitability, leading to integration and strategic pivots within the industry.
Source: hashrate index
3. Hashrate Derivatives Increase: A Game-Changer for miners
One of the most significant finances in Bitcoin mining in 2024 was the rapid expansion of the hashrate derivatives market. The emerging market allowed miners to redeem future income streams and reduce exposure to volatility of bitcoin prices, initiating the change of how they manage the risk.
Traditionally, mining revenues are at the mercy of the sunny prices of bitcoin swings, making it difficult for operators to forecast cash flow or secure financing. However, with increasing hashrate markets forward, miners can sell future hashrate production at a fixed price, locked in the months of income in advance. This financial instrument works similarly to commodity futures in the energy sector, where power manufacturers pre-sell power contracts to stabilize income.
In 2024, these former markets saw explosion growth. Over-the-counter (OTC) volumes climb more than 500% year-year to Luxor’s hashrate forward market, with contract durations of up to 12 months. Meanwhile, regulated exchange trading has taken a key step forward with bitnomial launch of hashrate futures, making it the first regulated exchange to offer a bitcoin mining product.
The maturation of the hashrate forward market has signed a new financial mining period -the one where miners have more control over their income streams, better access to capital, and improved stability against the volatility of bitcoin price.
4. Bitcoin mining meets AI & HPC: a concrete of industries
With mining income under pressure, Many companies pivoting AI and high-performance computing (HPC) to vary the income. Bitcoin mining infrastructure shares major similarities to AI data centers – both require extensive capacity and cooling capacity. However, the move is not easy: AI infrastructure is more expensive for every megawatt (millions compared to the road -of thousands for bitcoin mining), which requires significant capital investment.
Some miners embrace hybrid models, providing some of their strengths of computing on AI workloads while maintaining bitcoin mining operations. Companies such as Hive Digital Technologies, Hut 8, Core Scientific, and Bit Digital have been able to jump, securing a variety of AI contracts to grow and stabilize their cash flows.
Final thoughts
Bitcoin mining in 2025 is no longer about the price of Bitcoin. Institutional capital, hashrate derivatives and AI-driven diversification are rearranging the industry, providing miners with new tools to manage risk and optimize income. At the same time, post-halving pressure, increasing competition and infrastructure costs have made efficiency and flexibility more critical than ever before.
For investors and advisers, understanding these changes is important. Mining stocks no longer move to the lockstep with Bitcoin, and new financial instruments change how the miners work. As the industry continues to grow old, those who recognize these structural changes are better positioned to navigate future opportunities.
– Ben Harper, Director, Luxor Technology
Ask an expert
Are Bitcoin miners really serious about destroying the AI market?
Completely. Since 2022, Bitcoin miners have been further exploring AI business lines and high performance (HPC). Some of the earliest movers in this shift are Hut 8, Hive, Iren, Scientific and Bit Digital core. Most recently -Riot, Riot placed 600 MW its expansion in Corsicana in pause to check the site for loading AI, Cipher received $ 50 million investment from softbank for its own AI project, and Lancium and Crusoe Energy is building a multi-gawinatt campus for AI as part of Project Stargate.
How do Bitcoin miners discuss their AI transfers? Is there a size-appropriate-all approach?
AI/HPC techniques vary from miner to miner. Cube 8 and Bit digitalFor example, chosen to obtain existing businesses at the data center rather than develop their own data centers from the start or re -re -reefit existing infrastructure. Basic scientific.Riot can follow a similar model It should decide to convert parts of its Corsicana Campus to an AI data center). And so on, such as Hive and IronGPUs were purchased to operate AI/HPC cloud services within their existing facilities. Each of these techniques has tradeoff .
With strong demand on the market for AI, are Bitcoin miners still mine of Bitcoin?
Today, many Bitcoin miners – including Mara, Cleanspark and Bitfarms – are still focused on Bitcoin’s mining instead of chasing AI/HPC Golden Rabbit. Although Bitcoin miners are converting parts of their infrastructure to loading AI/HPC, they are likely to mine Bitcoin, even if they reduce their focus on this purpose. Ultimately, Bitcoin and AI/HPC mining are more auxiliary than competitive, as miners can use Bitcoin mining to -MOMetize the energy they have already paid for when AI/HPC demands low.
– Colin Harper, editor-in-chief, blockspace media
