The share prices of MARA and Riot, two major mining companies that chose to hold Bitcoin, fell by 20% and 36% respectively this year.

Six months after the bitcoin halving event, crypto miners are choosing between two different paths to stay viable. Publicly traded miners including MARA Holdings, Riot Platforms and CleanSpark are holding onto their output in anticipation of its appreciation. Meanwhile, a growing number of companies are investing more in developing data centers to power artificial intelligence applications. “With profit margins squeezed so much, one of the few strategies for miners to retain investors is to hold onto their output, betting on future price appreciation while relying on equity or debt financing,” said Wolfie Zhao, an analyst at research firm TheMinerMag. “By avoiding selling bitcoin at an immediate loss, they can avoid potential losses and position themselves for gains when a bull run emerges.” Shares of the two largest publicly traded bitcoin miners, MARA and Riot, are down 20% and 36% this year, respectively, and both companies are “hodlers.” Shares of Core Scientific have nearly quadrupled since announcing in January that it had signed a series of multibillion-dollar contracts with AI upstart CoreWeave. The miner will transform some of its data centers to accommodate GPUs that can generate high-performance computing power for artificial intelligence applications. TeraWulf, whose shares have more than doubled this year, is also developing the AI ​​data center sector. Other bitcoin miners that are putting more resources into AI, such as Iris Energy and Bit Digital, tend to outperform some of their peers who are doubling down on their holdings. “Our view is that pure play bitcoin mining has a place in the market right now because it creates economic value from growing bitcoin mining capacity,” said Paul Golding, senior analyst at Macquarie Capital USA. He has an “outperform” rating on MARA, Riot, Core Scientific, Iris Energy, CleanSpark and Cipher Mining. “This will be a very successful strategy in an environment where bitcoin prices are rising, but it will be a disaster if bitcoin prices plummet, and you’ll continue to see negative profits, and they are covering up the poor state of the industry and the state of operations by diluting shareholders and buying new miners,” said Ethan Vera, chief operating officer of Luxor Technology. (Bloomberg)