Bitcoin mining companies are benefiting from a dual positive catalyst, with their stock prices surging due to the rise in cryptocurrency prices and a strategic shift toward artificial intelligence (AI) infrastructure. This not only boosts short-term market sentiment but may fundamentally reshape their long-term investment value.
Driven by recent highs in Bitcoin prices and news of business diversification, shares of several Bitcoin mining companies surged significantly during pre-market trading on Tuesday. Among them, Bitfarms and Iren led the gains, rising 11.85% and 11.60%, respectively; Hive Digital Technologies increased by 6.82%, TeraWulf rose by 3.68%, while CleanSpark and BitFuFu also recorded varying degrees of gains.
The immediate drivers behind this rally are clear. On one hand, the strengthening price of Bitcoin directly enhances the profitability and asset value of miners’ operations. On the other hand, the market is increasingly focused on these companies’ expansion into AI data centers, which opens up a new growth trajectory independent of the cryptocurrency cycle.
This strategic transformation is attracting close attention from Wall Street. Analysts believe that Bitcoin mining companies, with their ready-made power and infrastructure, hold a unique advantage in meeting the explosive electricity demands of the AI industry. This shift could trigger a revaluation of these companies, transforming them from mere cryptocurrency-related stocks into key digital infrastructure providers.
AI Power Bottleneck Highlights Unique Value of Mining Companies
The explosive growth of artificial intelligence is creating an unprecedented demand for electricity, with power supply becoming a hard constraint on the industry’s development. In a research report, Morgan Stanley pointed out that the United States alone is expected to face a significant power shortage of up to 45 gigawatts (GW) for data centers between 2025 and 2028.
The report analyzed that new power projects typically take years from approval to grid connection, making it difficult to meet the pressing needs of the AI industry. ‘Access to power’ has become the primary reason for delays in data center projects. Against this backdrop, the unique value of Bitcoin mining companies becomes evident. They possess the core assets most valued by AI companies: approved grid connections and large-scale power supply capabilities, allowing them to bypass time-consuming approval processes.
Morgan Stanley believes that for AI companies seeking rapid deployment of computing power, Bitcoin mining companies represent the ‘fastest route to securing power with the lowest execution risk.’
Undervalued ‘Power Assets’: Significant Potential for Valuation Reassessment
Currently, the valuation logic of many Bitcoin mining companies remains primarily based on their mining operations, but the market may be underestimating their intrinsic value as ‘power assets.’ Morgan Stanley emphasized that ‘Enterprise Value per Watt’ (EV/Watt) is a critical yet overlooked metric for assessing the value of such companies.
Data shows that U.S. bitcoin mining companies own approximately 6.3 gigawatts of large-scale operational sites, with an additional 2.5 gigawatts of capacity under construction. The report notes that the current ‘enterprise value/watt’ of many mining companies is significantly lower than their potential value as data center infrastructure, presenting investors with a notable valuation mismatch and potential Alpha opportunity.
Converting these sites into AI data centers aligns well with the timeline required to enhance the power infrastructure for bitcoin operations, offering AI companies a ready-made solution.
From Mining to Computational Infrastructure: Analysis of Value Creation Models
Transforming bitcoin mining facilities into high-performance computing (HPC) data centers can generate substantial economic value. Morgan Stanley conducted an analysis using a value creation model, which assumes that a mining company converts a 100-megawatt site into a ‘powered shell’ data center (i.e., providing space, power, and cooling but excluding chips and servers) and leases it to customers on a long-term basis.
The analysis indicates that if the tenant is a large cloud service provider (Hyperscaler), the project could generate approximately $5.19 per watt in equity value; if the tenant is an emerging cloud service provider (Neocloud), the equity value generated could be higher, reaching approximately $7.81 per watt.
The report highlights that this potential value creation of approximately $5 to $8 per watt far exceeds the current trading levels of many bitcoin mining stocks. Additionally, this business model typically employs project financing, featuring high leverage while avoiding the technological and commercial risks associated with directly holding chips, making it attractive to all parties involved.
Editor/Joryn