Bitcoin Miners Abandoning Crypto for AI Computing Boom

Riot's recent deal with Anthropic has shed light on an emerging trend among Bitcoin miners. They are increasingly looking beyond crypto mining towards AI infrastructure, as access to massive amounts of power becomes more valuable than the BTC mining machines plugged into it.

The economics of mining have become less attractive, particularly with Bitcoin trading below its all-time high. Scott Melker, a prominent crypto investor, argued that miners' biggest asset may not be their mining equipment but access to electricity and infrastructure capable of supporting energy-intensive computing.

Riot's own numbers support this claim. The company reported an average cost to mine Bitcoin of $49,912 during Q2, excluding depreciation, up from $48,992 a year earlier. Melker noted that once depreciation and other expenses are considered, the economics of mining become substantially less attractive.

The shift towards AI infrastructure could create an unexpected positive for Bitcoin despite reducing the incentive for large U.S. miners to dedicate their infrastructure exclusively to BTC. This could potentially reduce concerns about mining concentration among a relatively small number of large corporate players.