2024 was a record-breaking year for the Bitcoin mining industry, but increased competition and sector volatility compelled several companies to adopt new strategies.
According to a Jan. 7 report by NiceHash and Digital Mining Solutions, public miners followed in MicroStrategy’s footsteps by increasing their Bitcoin (BTC) treasury holdings.
“In 2024, a notable shift emerged among Bitcoin miners, with many opting to retain a larger portion of their mined Bitcoin or refraining from selling altogether,” wrote report authors Nico Smid and Cindy Geng.
Miners may refrain from selling their Bitcoin for several reasons, including anticipation of further price appreciation for BTC or strengthening their balance sheets. If they’re really following MicroStrategy’s playbook, a BTC treasury may also be used to hedge against currency devaluation.
As the report noted, MARA Holdings, Riot Platforms and Hut 8 purchased additional Bitcoin using borrowed funds, further amplifying their treasury strategies.
In addition to acquiring BTC, miners such as CleanSpark have opted to retain the majority of the Bitcoin mined in recent months.
Bitcoin miners MARA Holdings (MARA), Riot Platforms (RIOT), Hut 8 (HUT) and CleanSpark (CLSK) are among the largest BTC holders. Source: Digital Mining Solutions
Four of the 16 largest Bitcoin holders are mining companies, the report said.
Related: Bitcoin ETFs scooped up almost 3X more BTC than produced in December
Shifting business strategy
In addition to their core mining business, some miners in 2024 “further diversified into [high-performing computing] and AI sectors, generating predictable revenue streams to buffer against mining volatility,” the report said.
This trend was especially pronounced in the United States, where “harsh mining economics and lucrative AI/HPC business tempted them to diversify into other compute.”
Bitcoin miner Hive Digital told Cointelegraph in September that it repurposed its Nvidia GPU for artificial intelligence applications.
According to Aydin Kilic, Hive’s president and CEO, using Nvidia GPUs for AI tasks generates over $2 per hour in revenue compared to just $0.12 per hour for crypto mining.
The company’s HPC and AI platform generated more than $2 million in revenue in the second quarter alone.
According to the NiceHash and Digital Mining Solutions report, several BTC miners with a market cap of at least $100 million generated significant revenue from AI and HPC initiatives.
For example, HPC/AI revenue accounted for nearly 8% of Hut 8’s revenues in the first three quarters of 2024. This figure was nearly 7% for Hive Digital.
AI and HPC initiatives account for a growing share of Bitcoin miner revenues. Source: Digital Mining Solutions
Related: Bitcoin miners cut costs, embrace AI post-halving: CoinShares
