Shifting investor priorities for bitcoin mining operations

An influx of capital to public bitcoin miners following bitcoin’s third halving event in May 2020 helped pave the way for a surge in public listings, as miners sought to capitalize on investor appetite. Scale was paramount, and investors rewarded firms that expanded aggressively and produced large quantities of bitcoin.

But the landscape that rewarded unrestrained growth in 2021 has since shifted. Rising operational costs, increasing network difficulty and maturing investor expectations set the stage for a very different reality by the time the next halving arrived in April 2024, reducing block rewards from 6.25 BTC to 3.125 BTC. This shift caused a shakeup, as BTC’s price appreciation did not fully offset the revenue drop for many miners. Network difficulty hit new highs, transaction fee income declined and “hashprice”—the revenue per unit of hash rate—fell sharply even as bitcoin’s price reached all-time highs.

This divergence exposed a new dynamic; mining stocks no longer served as the default avenue for indirect bitcoin exposure. As mining stock valuations declined from their prior highs, the approval of spot bitcoin exchange-traded funds in early 2024 further accelerated the shift, offering institutions a more efficient and direct way to gain BTC exposure. This one-two punch diminished the valuation premium that mining stocks had historically enjoyed. In response, investors have become more selective, focusing less on raw operational metrics and more on long-term fundamentals such as operational resilience, treasury strategy and risk management.

The evolution of Treasury strategy

In the early 2020s, investors’ interest in bitcoin mining was guided by straightforward operational metrics such as hash rate output, access to cheap power and hardware efficiency. Bitcoin’s third halving in May 2020 sparked enthusiasm in the industry as mining profitability increased significantly during the bull market that followed. During this period, mining stocks were often viewed as a proxy for bitcoin exposure, driven by the absence of a U.S. spot bitcoin ETF at the time.

As a result, institutional and retail capital flowed aggressively into public miners, raising billions through equity and debt offerings to support rapid expansion. In 2021, the BTC mining sector experienced an unprecedented wave of public listings, including Iris Energy, Stronghold Digital Mining and a public filing by BitDeer, later completed in 2023.

Between 2020 and 2022, the “mine-to-HODL” (mine-to-hold) approach became a popular capital strategy among public miners, appealing to investors who sought a proxy for direct bitcoin exposure.

However, the prolonged bear market that followed in 2022–23 stress tested this model. As bitcoin prices declined and fiat-denominated operating costs persisted, even the most resolute HODLers began to sell portions of their holdings to fund daily operations. MARA Holdings—which had positioned itself in 2020 as a “pure-play bitcoin investment”—started monetizing some of its bitcoin in early 2023 to manage liquidity. This marked the sunset of the pure HODL era and reinforced a key investor insight that large bitcoin reserves are beneficial in bull markets but can quickly become liabilities without supporting cash flows or credit access.

This period also introduced a new financial risk for miners: the delayed delivery of outdated ASIC batch orders. Many miners found themselves contractually obligated to pay for and receive previous-generation machines even as next-generation models hit the market. As a result, these miners were saddled with hardware that struggled to remain competitive from a profitability standpoint.

Now, treasury strategy has become more sophisticated. MARA resumed its HODL approach in mid-2024, acquiring an additional $100 million in bitcoin and reinstating a policy of non-liquidation. MARA’s CEO, Fred Thiel, characterized this decision as a reaffirmation of long-term confidence, describing bitcoin as the “world’s best treasury reserve asset.”

Conversely, firms like CleanSpark pursued a more balanced strategy. In April 2025, CleanSpark reported selling a portion of its bitcoin production at an average price exceeding $90,000 to self-fund operations. It still maintained over 12,100 BTC in reserve, illustrating a dual approach: selling to fund operations while continuing to build reserves.

Alongside evolving treasury strategies, the adoption of hedging tools and financial engineering has accelerated. Hash rate derivatives, such as forwards and regulated futures, gained traction throughout 2024. These instruments allow miners to lock in revenue for future bitcoin production, thereby insulating themselves from volatility in bitcoin price and network difficulty.

The broader use of structured financing also reflects a growing toolkit of financial instruments that miners are using to fund expansion, manage volatility and avoid overexposure to market swings.

Diversification: From bitcoin mining to broader markets

As bitcoin block rewards shrink and margins tighten, diversification has become a key theme. Several leading miners have begun converting their existing infrastructure, abundant power capacity, advanced cooling and secure data centers into platforms for high-performance computing (HPC) and AI workloads. This trend shows that the underlying hardware (excluding ASICs) and facilities used in bitcoin mining are transferable to adjacent industries with potentially higher margins.

Hive Digital Technologies transitioned its former Ethereum GPU fleet into cloud computing services, while Hut 8 entered the HPC space by acquiring data center operations to provide managed services. Even Riot Platforms—previously a bitcoin-only miner—paused a major expansion to explore AI integration. Cipher, another U.S.-based miner, secured a $50 million investment to develop a parallel AI computing operation. Still, transitioning from bitcoin mining to AI or other forms of HPC is far from simple. AI HPC data centers have differing requirements, including access to abundant water for liquid cooling systems, dark fiber for high-speed, low-latency connectivity and extremely stringent uptime standards, often 99.999%, to support mission-critical workloads. These demands stem from the fact that AI model training and HPC tasks are computation- and data-intensive, making uninterrupted performance and reliable data throughput essential. 

Furthermore, proximity to metropolitan areas is often preferred for AI/HPC operations to ensure network redundancy, lower latency to cloud service providers and better access to technical talent. In contrast, many bitcoin mining data centers are in remote regions with access to low-cost electricity, posing a challenge when retrofitting for AI/HPC use cases. 

Even with these barriers, bitcoin miners are uniquely positioned to pivot and support the growing wave of HPC demand. According to McKinsey & Company, demand for AI-ready data center capacity is projected to grow at an average annual rate of 33% per year between 2023 and 2030, with estimates suggesting that by 2030, nearly 70% of all data center demand will be driven by AI workloads. Global investment in AI-capable data centers reached approximately $24.6 billion in 2023 and is expected to double to nearly $47.7 billion by 2029. 

Most competitors cannot afford to wait 18 to 30 months to bring new data centers online, making the repurposing of existing BTC mining facilities an attractive alternative. These sites already have critical infrastructure like power, cooling and physical space in place, allowing for significantly faster deployment. As the AI data center market outpaces traditional data center growth, the ability to bring capacity online quickly will be a defining competitive edge. For bitcoin miners, this creates a timely opportunity to reposition themselves in the data infrastructure economy and reduce their dependence on bitcoin’s price cycle.

Monetizing energy flexibility

Bitcoin miners are becoming more active participants in energy markets, especially in regions with deregulated grids like Texas. Riot Platforms, for example, has pioneered the monetization of load flexibility through demand-response programs with ERCOT. In 2023, Riot earned approximately $71 million in energy credits by curtailing operations during periods of peak demand, equivalent in value to about 2,500 BTC. In August alone, the company earned $31.7 million by reducing usage during a heatwave, outpacing that month’s mining revenue. Others are exploring models to sell excess wind or solar output (stranded energy) or participate in ancillary service markets, moves that carry operational and environmental, social and governance (ESG) advantages which are increasingly appealing to investors.

Genesis Digital Assets built sizeable mining facilities in Kazakhstan to capitalize on its low-cost, coal-fired power generation. The company leveraged locally abundant coal energy to reduce operating costs and grew into a billion-dollar operation, partly funded by a $1 billion investment from Alameda Research in 2021–22. Although this strategy significantly cut energy costs, it has increased carbon intensity and faced greater regulatory scrutiny as Kazakhstan tightens oversight.

Another example is Mining Monero in Puerto Rico, which uses older-generation mining rigs while taking advantage of unique tax incentives under the Puerto Rico Act 60. These operations are thriving on depreciated equipment, enjoying low marginal costs while benefiting from generous property and research and development (R&D) credits.

ESG alignment as an investment gatekeeper

The increase in ESG-conscious investing has prompted many mining companies to reexamine their environmental positioning as public criticism of bitcoin’s energy usage grew. Currently, large capital allocators apply sustainability filters to their investment decisions, prompting miners to improve their transparency and sustainability practices.

While bitcoin mining has often been singled out in ESG debates, it is far from the only high-compute industry under environmental scrutiny. AI and HPC operations face similar criticism over their carbon footprints and pressure to disclose energy sources and sustainability strategies. The rapid growth of generative AI, large language models and other computation-heavy workloads has accelerated demand for electricity and water-intensive cooling systems.

For institutional investors applying ESG screens, the scrutiny is expanding beyond crypto to any industry driving large-scale data center growth.

For mining and AI companies, ESG alignment is no longer just a matter of reputational risk, but of access to institutional capital. Clean operations may appeal to ESG funds, pension managers and other institutional investors who would otherwise avoid high-compute industry exposure.

A new investor paradigm

The profile of a successful bitcoin mining firm is drastically different now than it was in 2020. Today’s investors are looking for firms that combine low-cost production with a sound financial strategy, strong governance and adaptability. Companies that focus solely on hash rate growth or coin accumulation without managing risk, liquidity or diversification are at a disadvantage.

Many firms that have pivoted to maintain a competitive edge are no longer simply miners; they are strategic capital allocators, infrastructure operators and financial managers. As bitcoin mining matures, so, too, do the expectations from those who invest in it. Operational success requires not just machines and megawatts, but foresight, flexibility and financial discipline.