Bitcoin Halving Effect Weakens as Miners Shift to AI Computing Power

Bitcoin Halving Effect Weakens as Miners Shift to AI Computing Power

Bitcoin's fourth halving was completed in April 2024, reducing the block reward from 6.25 BTC to 3.125 BTC. Although Bitcoin's price briefly surpassed $100,000 after the halving, miners face unprecedented revenue pressure. According to CoinMetrics, miners' average daily revenue dropped about 50% post-halving, while network hashrate remains near all-time highs, squeezing per-unit profitability. In this context, a growing number of top mining firms are turning to artificial intelligence (AI) cloud computing services to diversify income.

Why Is the Halving Effect Weakening?

Traditionally, Bitcoin halvings are seen as catalysts for long-term price appreciation due to reduced new supply. However, this cycle's "price effect" appears to have been priced in early. Bitcoin's 2024 rally above $100,000 was driven primarily by spot ETF approvals and institutional inflows, not solely by the halving. Meanwhile, miners face fundamentally higher costs: rising electricity prices and faster miner iteration (e.g., Bitmain's S21 series offers better efficiency but at higher prices), pushing many small and medium miners into losses post-halving. According to F2Pool, the shutdown price for older models like the S19 series is now near or above current Bitcoin prices, forcing miners to either upgrade or exit.

Miners Transition: From Mining to Selling Computing Power

Facing revenue declines, top miners are exploring diversification. Converting idle computing power into AI cloud services has become a key focus. AI training and inference require massive GPU power, and Bitcoin mining farms have natural advantages in electricity costs, cooling management, and data center operations. For instance, North American listed miner Marathon Digital Holdings has announced partnerships with AI cloud providers to convert some mining sites into AI data centers. Another miner, Riot Platforms, plans to allocate 20% of its computing power to AI by 2025. According to a JPMorgan report, miners transitioning to AI cloud services can shift from volatile Bitcoin price dependency to more stable subscription-based revenue, potentially contributing 30%-50% of top miners' revenue by 2025.

Market Impact: Reshaping the Computing Power Landscape

Miners moving into AI computing power are reshaping competition in both crypto and cloud computing. On one hand, Bitcoin's network hashrate may see a temporary decline as some miners are redeployed for AI tasks. Glassnode data shows Bitcoin's hashrate growth slowed to single digits in Q4 2024, compared to over 30% in the previous two years. On the other hand, the AI cloud market gains new entrants. These miners, with low-cost electricity, could undercut traditional providers like AWS and Azure. However, the transition faces technical hurdles: AI computing requires high-bandwidth, low-latency networks, while Bitcoin mining farms are often distributed, making conversion challenging. Additionally, shortages of AI chips like NVIDIA H100 limit expansion speed.

Risks and Challenges: Not All Miners Will Succeed

Despite the promising outlook, not all miners can smoothly enter the AI space. First, AI cloud services require significant upfront capital for GPUs, network upgrades, and AI engineers—a major barrier for smaller miners. Second, the AI industry is highly competitive, with clients demanding high stability and data security; failing to meet SLA standards could lead to penalties. Finally, if Bitcoin prices surge again, miners might revert to mining, causing AI computing supply volatility. According to CoinDesk analysis, miner AI transitions are more of a hedging strategy than a full replacement of mining.

Future Outlook: A Dual-Engine Model

Looking ahead to 2025 and beyond, miners may split into two groups: "pure miners" focused on Bitcoin mining through continuous hardware upgrades and cost optimization, and "computing power service providers" offering both Bitcoin and AI computing, flexibly allocating resources based on market conditions. This dual-engine model could reduce cyclical risks but demands stronger management. Industry forecasts suggest the global AI cloud market will exceed $200 billion by 2026, and successful miner transitions could capture 5%-10% of that share. For investors, miner valuations may shift from "Bitcoin mining stocks" to "computing infrastructure stocks," implying higher growth potential and more complex risks.

Risk Warning

The above content is for reference only and does not constitute investment advice. The cryptocurrency market is highly volatile, and miner transitions into AI face multiple uncertainties including technology, capital, and market competition. Investors should fully understand the risks and consult professional financial advisors before making decisions.