Bitcoin Miners' AI Ambitions Undervalued by Market: VanEck Analyst

A recent data center transaction in Northern Virginia has given analysts a new benchmark for valuing AI infrastructure. VanEck's Matthew Sigel used Digital Realty's $3.5 billion purchase of three fully leased AI data centers to assess the value of Bitcoin miners pivoting to AI infrastructure. According to Sigel, Cipher Mining and Hut 8 are being undervalued by the market.

The transaction, which was valued at around $27 million per megawatt, has set a new standard for stabilized AI infrastructure. Sigel compared this figure to the value of Bitcoin miners' AI-related leases, which range from $3 million to $12 million per megawatt. This gap suggests that investors are undervaluing the energy-generating capacity and development pipelines of these companies.

Cipher Mining and Hut 8 have both branched out into AI and high-performance computing infrastructure, but their valuations remain low. Sigel estimates that Cipher Digital's 313 megawatts of energized-but-unleased capacity is worth more than $2.9 million per megawatt, while Hut 8's 443 megawatts are worth more than $2.1 million per megawatt.

Sigel argues that the market is pricing these companies' long-dated pipelines as if demand for AI infrastructure stops, leasing rates plummet and the opportunity never materializes. However, he believes that every signed lease, every megawatt, and every quarter of steady GPU pricing makes the gap closer.