Canaccord Genuity predicts stable and profitable Bitcoin mining economics for 2023, driven by robust fundamentals and the emergence of alternative uses for mining companies' power resources, particularly in AI data center hosting.
Bitcoin mining economics are projected to remain stable and profitable throughout the current year, according to a research report released by Canaccord Genuity on Tuesday. The report highlights the robust fundamentals of the mining sector, noting that the cost of mining per bitcoin for most prominent players ranges from approximately $26,000 to $28,000.
Beyond traditional mining operations, the report emphasizes the growing interest from management and investors in exploring alternative applications for the substantial power resources possessed by mining companies, particularly in the realm of artificial intelligence (AI) data center hosting. This shift gained significant momentum after the groundbreaking partnership between CoreWeave, an AI hyperscaler, and a major Bitcoin mining company in June of the previous year. This deal was widely regarded as a transformative event for the industry. Analysts led by Joseph Vafi predict that the demand for AI will ultimately surpass the traditional cloud hosting market. The report anticipates further announcements of co-hosting agreements early this year, with potential developments involving Galaxy Digital (GLXY) and Applied Digital (APLD). Moreover, Canaccord states that numerous publicly traded mining companies are leveraging their access to capital to enhance their mining fleets following the Bitcoin halving event in April of last year. This strategic investment is bolstering their competitive standing and expanding their share of the overall network hashrate.
BITCOIN MINING PROFITABILITY AI DATA CENTERS CANACCORD GENUITY
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