Inflation Stays Stubborn as Miners Profit from Red Tape

Recent US data has left the Federal Reserve in a challenging position as inflation remains stubborn. The Fed's preferred measure, core PCE for July, rose 0.2% month on month and 3.3% year on year, both in line with consensus.

However, other data points suggest that the economy is not deteriorating fast enough to force the Fed's hand. Consumer confidence fell to 89.4 in August, its weakest in seven months, while new home sales dropped 10.5% in July to 607,000.

The red tape surrounding US data centre build-out has created an opportunity for Bitcoin miners, who are among the principal beneficiaries. Data centre vacancy has fallen from 10% in 2019 to around 1%, and capacity seeking a grid connection stands at roughly 2,060 gigawatts against total installed US generating capacity of roughly 1,300 gigawatts.

Miners already hold this infrastructure and face no regulatory hurdle to switching capacity into AI. The share of revenue from AI across the listed mining sector has climbed from around 30% toward an estimated 70% by year end.