Bitcoin miners shift strategies and diversify into AI in 2024

In 2024, Bitcoin (CRYPTO:BTC) mining companies adopted new strategies to navigate increased competition and sector volatility, with a key focus on expanding their treasury holdings and diversifying into high-performing computing (HPC) and artificial intelligence (AI) sectors.

According to a report by NiceHash and Digital Mining Solutions published on January 7, 2024, the combined market capitalisation of public Bitcoin miners reached a record $50 billion for the first time.

A significant shift in the industry was observed, as miners, including MARA Holdings, Riot Platforms, and Hut 8, chose to retain larger portions of their mined Bitcoin, mirroring the treasury strategy of firms like MicroStrategy.

The decision to hold onto Bitcoin instead of selling stems from various factors, such as expectations of future price appreciation and the desire to strengthen company balance sheets.

Some miners also see holding Bitcoin as a hedge against currency devaluation.

The report notes that these strategies were further amplified by companies purchasing additional Bitcoin using borrowed funds.

In addition to their core mining operations, many miners turned to AI and HPC ventures in 2024 to stabilise revenues amid the volatility of Bitcoin mining.

For example, Hive Digital repurposed its Nvidia GPUs for AI applications, generating over $2 per hour in revenue, compared to just $0.12 per hour from crypto mining.

This shift toward AI and HPC was particularly noticeable in the United States, where the profitability of AI technologies lured miners away from traditional mining.

The report highlighted that a significant portion of revenue for several large mining companies, such as Hut 8 and Hive Digital, now comes from AI and HPC.

In fact, AI/HPC revenue accounted for nearly 8% of Hut 8’s earnings in 2024, indicating a growing trend toward diversification in the Bitcoin mining sector.

At the time of reporting, the Bitcoin (BTC) price was $96,565.62.