According to market maker Wintermute, many Bitcoin miners are struggling to make a profit this market cycle due to declining revenues, so they may need to pivot to artificial intelligence hosting or leverage their stock holdings to generate revenue.
Wintermute wrote in a blog post on Thursday that Bitcoin ($BTC) Miners have spent years building large-scale power infrastructure in low-cost energy markets, but now find themselves “sitting exactly on what the AI industry most urgently needs and cannot easily replicate.”
The company said that Bitcoin mining is a “structurally rigid business model” and that while the switch to AI is attractive, it is also a “drastic, capital-intensive step.”
The report comes as mining giant MARA Holdings, which has been most focused on AI, filed with the SEC on March 3 indicating its intention to sell some of its assets. $BTC Focus on technology. Meanwhile, listed miners have sold more than 15,000 Bitcoins since October.
Miners clinging to Bitcoin are a “legacy of the HODL era”
Wintermute said Bitcoin miners collectively hold nearly 1% of the total. $BTC It argued that supply is a “legacy of the HODL era” and that “the complete toolkit of financial management remains largely untapped.”
While yield generation in cryptocurrencies has traditionally been limited to staking and DeFi, Wintermute said miners have the potential to leverage yield through active management, including monetizing market risk through derivative structures, covered calls, and cash collateralized puts.
Passive management options include deployment $BTC It is incorporated into the lending protocol to earn interest.
Bitcoin revenue and gross profit have decreased significantly compared to previous cycles (epochs). sauce: winter mute
“We believe active balance sheet management is the most underutilized tool available to miners and deserves more strategic attention,” Wintermute said. “The miners who treat them $BTC Holding it as an operational asset rather than a passive reserve will provide a structural advantage during the next halving. ”
Related: Mining companies go deeper into AI, HPC as MARA may sell Bitcoin
Wintermute said that for the first time in a four-year market cycle, Bitcoin has failed to achieve the double price return needed to offset the revenue reduction from the halving, with gross margins reaching levels that previously marked the lower bound of a bear market.
Moreover, the trading fee market is “temporary” and unstructured, so it does not fill the gap. At the same time, energy costs continue to squeeze profits.
The company noted that data suggests this tightening is different from previous cycles in 2018 and 2022, and described it as a “healthy transformation” that fits Bitcoin’s design and will make the mining industry “more efficient as a result.”
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