A bitcoin miner just sold more than $1 billion worth of its own holdings.
Which, at first glance, might seem like a strange move. After all, bitcoin miners are companies that run energy-intensive computers to generate bitcoin. They’re supposed to accumulate it, not dump it.
But this company’s decision had very little to do with the current state of the crypto market, and everything to do with a bigger trend that I identified last year.
In fact, I’m convinced it’s a clear indicator of where this industry is headed next.
And if you’re not paying attention, you could be missing out on a huge opportunity.
From Crypto to Compute
Marathon Digital (Nasdaq: MARA) recently sold over 15,000 bitcoin for roughly $1.1 billion.
Most of that money is going toward repurchasing $1 billion of its convertible notes. And on its own, that might simply seem like routine balance-sheet management.
But that’s only part of the story.
In late February, Marathon announced a partnership with Starwood Digital Ventures to build infrastructure for AI workloads on its existing sites. The initial buildout targets about 1 gigawatt of capacity, with a path to more than 2.5 gigawatts over time.
This would more than double the roughly 1.9 gigawatts the company already operates across 18 data centers globally.
For context, 1 gigawatt is enough electricity to power roughly 750,000 homes.
At full buildout Marathon is talking about enough power to run a mid-sized U.S. city.
Image: Wikimedia Commons
That’s a radical change to the company’s business model.
And it’s not an isolated case.
Core Scientific (Nasdaq: CORZ), one of the largest bitcoin mining operators in the U.S., has been putting its facilities to a similar use.
The company signed long-term agreements with CoreWeave (Nasdaq: CRWV), an AI cloud provider that supplies computing power to companies training and running AI models.
In simple terms, Core Scientific has been taking sites that were built for mining bitcoin and using them to house and power CoreWeave’s AI hardware instead.
In August 2024, Core Scientific said those contracts represented about $6.7 billion in projected revenue over 12 years.
Since then, the relationship has only deepened, with CoreWeave expanding its footprint across Core Scientific’s facilities.
And other miners are moving in the same direction.
In February, Hut 8 (Nasdaq: HUT) announced that its “power-first” model had already produced its first AI infrastructure transaction. The company is talking about an 8,500-megawatt development pipeline.
IREN (Nasdaq: IREN), which many investors still think of as a bitcoin miner, now describes itself as building data centers for AI and cloud workloads. The company has more than 4.5 gigawatts of power secured across North America and says its AI Cloud business has room for more than 60,000 GPUs across its British Columbia campuses.
As you can see, AI infrastructure is no longer a side business for these companies.
It’s becoming the business.
Over the past decade, bitcoin miners secured land, assembled large amounts of power, built electrical infrastructure, installed cooling systems and learned how to operate compute-heavy facilities around the clock.
Bitcoin was simply the first workload that justified this investment.
But now there’s another one.
You see, AI companies need what these miners already have: cheap power, dense compute and sites that can be brought online quickly.
The International Energy Agency projects that global data-center electricity consumption will more than double by 2030 to around 945 terawatt-hours, with AI as the main driver.
Image: IEA
In the U.S., data centers could consume 9% to 17% of U.S. electricity by 2030, up from roughly 4% to 5% today.
That’s a massive amount of new demand for an electrical grid that wasn’t built for this pace of expansion. Which makes existing, power-connected sites more valuable than ever.
That’s why bitcoin miners are making this move today.
Because they were never really just in the bitcoin business. They were in the business of converting electricity into revenue through compute-intensive workloads.
AI and high-performance computing are starting to look like the next version of that model, even though the economics are completely different.
Mining income rises and falls with bitcoin prices, network difficulty and halving cycles.
But AI capacity is typically sold through longer-term agreements tied to usage and uptime, which makes revenue more predictable. And, in many cases, more valuable.
CoinShares estimates that listed miners could derive as much as 70% of their revenue from AI by the end of 2026, up from roughly 30% today. Core Scientific’s AI hosting already accounted for 39% of its fourth-quarter revenue, while IREN’s AI Cloud business contributed 9% and is still expanding.
That doesn’t mean every miner will make the transition to this new business model successfully.
Some won’t.
But the direction the industry is heading is becoming hard to ignore.
Here’s My Take
To me, Marathon’s bitcoin sale looks like a company treating bitcoin as a source of funding for a larger buildout.
And if I’m right, then this isn’t a story about one miner raising cash.
It’s a story about an industry changing identities.
Mining companies spent years building large-scale compute infrastructure anchored to energy availability.
That infrastructure is now being repurposed as AI infrastructure.
And right now, demand for it is growing faster than anything else in technology.
Regards,
Ian King
Chief Strategist, Banyan Hill Publishing
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