Bitcoin mining stocks decouple from BTC price thanks to the AI wave: JPMorgan

robot
Abstract generation in progress

According to analysts at JPMorgan, shares of publicly listed Bitcoin mining companies have risen to the sky since July, despite Bitcoin prices remaining flat, indicating that the correlation between the two is “clearly deteriorating.”

The reason comes from miners shifting towards the field of artificial intelligence (AI), bringing a stable source of revenue and higher profit margins compared to increasingly unattractive Bitcoin mining.

In the past, the stocks of Bitcoin mining companies were often seen as tools to reflect the price fluctuations of BTC, especially before the emergence of spot ETFs. However, now, the stock prices of these companies are more influenced by the “AI narrative” rather than the crypto market.

The report also indicated that miners' profits are under significant pressure following the halving event in April 2024, when the block reward decreased from 6.25 BTC to 3.125 BTC. JPMorgan estimates the average cost to mine 1 BTC is currently around 92,000 USD, and it could rise to 180,000 USD after the 2028 halving – considerably higher than the current price of Bitcoin (~109,700 USD).

Meanwhile, investing in computing infrastructure for AI helps large companies become more flexible, allowing them to switch capacity between Bitcoin mining and AI computing, while small businesses are having to find new directions, including establishing reserves of Ethereum and Solana like BitMine and BIT Mining.

BTC0.32%
ETH-0.07%
SOL0.01%
View Original
This page may contain third-party content, which is provided for information purposes only (not representations/warranties) and should not be considered as an endorsement of its views by Gate, nor as financial or professional advice. See Disclaimer for details.
  • Reward
  • Comment
  • Repost
  • Share
Comment
0/400
No comments
Trade Crypto Anywhere Anytime
qrCode
Scan to download Gate App
Community
English
  • 简体中文
  • English
  • Tiếng Việt
  • 繁體中文
  • Español
  • Русский
  • Français (Afrique)
  • Português (Portugal)
  • Bahasa Indonesia
  • 日本語
  • بالعربية
  • Українська
  • Português (Brasil)