3 Reasons Why Bitcoin Miners Are Embracing AI
Highlights
- Bitcoin miners are embracing AI as the next major business pivot
- The regulatory certainty is one reason for this trend
- The success of NVIDIA and OpenAI is also a major motivation
Bitcoin miners are some of the most important players in the Web3.0 ecosystem. With their roles in ensuring BTC supply, they are mostly affected by the changes in the network, especially Halving cycles. With the past BTC halving this April, many expected the emergence of a more sustained bullish trend. Though Bitcoin price is steady above the $60,000 price mark, the profitability has dwindled in the past weeks.
This uncertainty has forced Bitcoin miners like CleanSpark, Marathon Digital and Riot Platforms to explore other ventures. Notably, most are pushing into establishing AI data centers and other naturally fitting artificial intelligence businesses. Here are three reasons why most miners consider the AI ecosystem the next gold mine.
1, More Bitcoin Mining Difficulty and Reduced Rewards
For each halving cycle, the associated rewards for Bitcoin miners are slashed by 50%. Though the expectation is that this BTC halving event will ultimately shrink supply and drive price growth, the trend is generally not progressively linear.
As such, the reduced incentives and the difficulty to mine a block is not looking attractive for miners in the long term. Drawing on this, many are pivoting into AI which is considered the future of technology. With their infrastructure, it becomes easier for Bitcoin miners recreate their data centers to accommodate AI innovators.
2, The AI Profitability
The artificial intelligence sector is a profitable one, considering the outlook for NVIDIA and OpenAI thus far this year.
Amidst the boost in the AI sector, American tech giant NVIDIA clocked a $3 trillion market capitalization while overtaking Apple in June. The company’s market cap is currently pegged at $3.39 trillion as many investors backed it for its role in the AI sector.
OpenAI secured a valuation of $157 billion earlier this month after raising $6.6 billion in funding. Many investors are backing OpenAI for its dominance in the AI ecosystem. With products like ChatGPT and Sora, it is redefining the future of the creativity and internet queries.
With these massive capital and valuation in the AI space, Bitcoin miners are confident in securing some of these funding to enhance their bottomlines.
Bitcoin Miners to Benefit from AI Regulation
Despite how established Bitcoin is, there is still a relatively unclear regulation around it. On the other hand, American and EU regulators are paying more attention to Artificial Intelligence regulations much more.
This regulatory certainty can guarantee sustainability in business operations, a major need for Bitcoin miners.
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