David Edwards
Following the April Bitcoin halving, major mining companies face a critical decision—whether to hold onto their Bitcoin (BTC) or invest in artificial intelligence (AI) upgrades. The halving event, which cuts miners’ earnings in half every four years, serves as a deflationary mechanism designed to preserve Bitcoin’s capped supply of 21 million.
Public mining firms such as MARA Holdings, Riot Platforms, and CleanSpark are opting to hold their mined BTC, anticipating a future price surge. Wolfie Zhao, an analyst at TheMinerMag, emphasized this approach, telling Bloomberg, “By avoiding the immediate sale of Bitcoin at a loss, miners can prevent realizing potential losses and position themselves for gains if a bull market emerges.”
Meanwhile, another emerging trend among miners is investing in AI infrastructure. Core Scientific, for example, has seen its stock nearly quadruple after signing multi-billion-dollar contracts with AI startup CoreWeave. The company, which successfully restructured after emerging from bankruptcy earlier this year, is positioning itself for growth in AI, and this strategy has garnered attention from investors.
However, miners focused on holding BTC have faced setbacks. Shares of MARA and Riot have fallen 20% and 36%, respectively, this year. By contrast, AI-investing miners like Iris Energy and Bit Digital have outperformed their BTC-holding counterparts.
Despite this divergence, miners holding onto Bitcoin remain confident. Many, like MARA and CleanSpark, operate profitably, and in a market with rising BTC prices, this strategy appears sound. Bitcoin miners have also resumed borrowing and issuing shares, using the capital to acquire more crypto, much like MicroStrategy’s aggressive BTC accumulation strategy.
However, some warn of potential risks. Ethan Vera, COO at Luxor Technology, cautioned that while holding BTC could pay off in a rising market, it could spell disaster if prices drop. “In a rising Bitcoin price environment, it is going to be an extremely successful strategy, but it’ll be a disaster if Bitcoin prices plummet…You will continue to see negative profits and they are hiding how bad the industry is right now by diluting shareholders and buying newer machines,” Vera stated.
The post-halving landscape presents a choice between HODLing Bitcoin and betting on AI, and only time will reveal which strategy delivers the greatest long-term returns.
