Cipher Mining and Iren soar, while the cryptocurrency market is "bleeding profusely," Bitcoin miners, however, "surge due to AI."

The valuation logic of Bitcoin mining companies is being completely reshaped. With the explosive growth in demand for computing power driven by AI, these former cryptocurrency gold miners are rapidly transforming into computing power suppliers favored by tech giants, with their stock performance significantly decoupled from the volatile crypto market.

On Monday, Bitcoin miner Iren announced a $9.7 billion, five-year cloud services agreement with Microsoft, which will utilize NVIDIA's advanced Blackwell series GPUs to provide computing power. Following closely, Cipher Mining also disclosed a five-year, $5.5 billion agreement with Amazon Web Services (AWS) to provide 300 megawatts of power capacity.

These significant collaborations with tech giants immediately ignited the market. In Monday's trading, Iren's stock surged 11.5%, while Cipher Mining's stock skyrocketed 22%, both hitting new highs during the session.

It is noteworthy that this round of explosive growth occurred as Bitcoin prices fell below $107,000, highlighting the market's new positioning for these companies—not merely as Bitcoin producers, but as key infrastructure suppliers in the AI wave.

Deteriorating Mining Economics Driving Transformation

The urgency for Bitcoin mining companies to transform stems from the ongoing deterioration of mining economics. Last year's Bitcoin halving reduced miner rewards from 6.25 Bitcoins to 3.125, while rising network difficulty and insufficient transaction fees further squeezed profit margins.

According to the Hash Price Index, Bitcoin miners' revenue metrics are approaching historical lows. Even with Bitcoin recently reaching historical highs, it has not significantly improved the unit revenue of mining companies.

Analysts from TheMinerMag pointed out that several mining companies, including Riot Platforms, Iren, and Bitfarms, have indicated that they will not expand their mining capacity in the near term.

Against this backdrop, transitioning to AI/HPC has become an extremely attractive path. Jeff LaBerge, Vice President of Market Capital and Strategy at Bitdeer, stated, “For Bitdeer, AI/HPC is a complementary alternative to mining.” The capital market is also rewarding these data center operators focusing on AI business with valuations far exceeding those of traditional mining companies, further accelerating the industry's transformation.

Valuation Models Are Undergoing Fundamental Changes

The stock prices of Bitcoin mining companies are increasingly reflecting their prospects in high-performance computing (HPC) and AI, rather than their mining business itself.

John Todaro, an analyst at investment bank Needham & Co., noted, “Investors are almost entirely valuing these companies based on HPC/AI opportunities. In our conversations with mining companies, the actual involvement of Bitcoin and Bitcoin mining accounts for less than 10%.” The market's re-pricing logic is clearly reflected in stock prices. Funds tracking publicly listed Bitcoin mining companies have surged over 150% this year, far exceeding Bitcoin's approximately 14% increase during the same period. Individual stock performance has been even more astonishing; as of October 31, Iren's stock price has skyrocketed 519% within 2025, while Cipher Mining's stock price has also more than quadrupled.

The core of this valuation difference lies in the fact that Bitcoin mining companies possess the scarce resource urgently needed by AI companies: connected electricity. In the context of a surge in AI computing power demand leading to electricity shortages, these ready-to-use electricity and site resources have become valuable, making them the "fastest way to obtain electricity with the lowest execution risk."

Core Competitiveness of Mining Companies: The Ability to "Provide Immediate Power"

The biggest advantage of Bitcoin mining sites over newly built data centers is time.

Morgan Stanley pointed out in a report that these mining sites have approved grid connections and large-scale power supply capabilities, allowing them to bypass the "heavy load interconnection" approval process that typically takes years for new data centers. This ability to "provide immediate power" is crucial in the current environment.

Data shows that U.S. Bitcoin mining companies not only have approximately 6.3 gigawatts of operational sites and 2.5 gigawatts of under-construction capacity but also have 8.6 gigawatts of development projects that have obtained grid access permits. The construction period for transforming these sites into AI data centers is about 18 to 24 months, allowing for a quick response to market demand.

At the same time, the U.S. is facing a severe power gap for data centers. According to forecasts, by 2028, U.S. data center developers will still face a power shortage of about 5 to 15 gigawatts. A survey report by Schneider Electric also confirms that "accessing power" has become the primary reason for delays in data center projects. In this context, the readily available electricity resources of Bitcoin mining companies have become an unparalleled core competitiveness