J.P. Morgan "Bitcoin mining companies' market capitalization surpasses $39 billion… AI expansion effect"

Bitcoin mining companies' market capitalization exceeded $39 billion in August, marking a record high. The expansion into artificial intelligence (AI) high-performance computing (HPC) is interpreted as a major contributing factor. According to a Decrypt report on the 3rd (local time), J.P. Morgan analysts said the total market capitalization of U.S.-listed mining companies set a record. J.P. Morgan is tracking 13 mining companies, including Hut 8, Core Scientific, TeraWulf, IREN, and Riot.

Bitcoin mining faces structural constraints of rising costs and declining rewards. After last year's halving, mining rewards fell from 6.250BTC to 3.125BTC, and the network hashrate reached a record high. As profitability deteriorated, companies have been selling held coins or seeking new revenue sources.

Recently some mining companies have been pursuing conversion to AI data centers. However, this requires much more complex cooling and HVAC systems than mining, so the barriers to entry are high. Nevertheless, Hut 8 announced last month plans to expand non-mining energy supply, securing a total of 1.53GW of new power across four U.S. sites.

Darsi Daubaras, Chief Financial Officer (CFO) of Hive Digital Technologies, said, "The goal is to benefit from the growth of both industries simultaneously through a dual business model combining Bitcoin mining and HPC," adding, "while scaling Bitcoin as a core product of a growth company, the HPC segment can generate complementary revenue as computing demand increases."