Galaxy Digital pivots to AI, targeting new revenue amid rising Bitcoin mining challenges.
Bitcoin miners adopting AI could boost profits, with potential $14B in gains by 2027, says VanEck.
Galaxy's Q3 report shows 27% drop in BTC production, highlighting mining pressures from April's halving event.
Galaxy Digital is exploring a shift towards artificial intelligence amid growing competition and operational challenges in cryptocurrency mining. In its Q3 report released on November 7, Galaxy revealed a preliminary agreement with a major US-based data center operator.
This move could potentially repurpose Galaxy’s 800-megawatt Helios mining facility in West Texas to support high-performance computing (HPC) for AI applications.
https://twitter.com/freedom198735/status/1854653090009321883
Currently, Galaxy operates 200 MW of this facility for Bitcoin mining. However, the company is evaluating the feasibility of securing an additional 1.7 gigawatts of power capacity.
This expansion aligns with industry trends, where increased energy demands and difficulty levels in Bitcoin mining are pushing companies to diversify. Final decisions on this AI transition hinge on thorough assessments and regulatory approvals.
AI Integration Grows Among Miners
Competitors like Riot Platforms and Marathon Digital are also weighing similar transitions. Core Scientific, another major Bitcoin miner, recently signed a 12-year partnership with CoreWeave, an AI-focused hyperscaler, projecting potential earnings of over $8 billion.
Industry analysts believe these AI integrations could open new revenue channels. VanEck, an asset management firm, forecasts that Bitcoin miners who allocate 20% of their energy resources to AI could see annual profits reach up to $14 billion by 2027.
Q3 Report Reflects Bitcoin Mining Struggles
The current hurdles in Bitcoin mining can be seen through Galaxy’s third quarter performance. Although the company mined 176 BTC (a 27% reduction), its mining revenue went down 23% to $18.5 million. Galaxy's mining capacity increased by 11% to 6.2 exahashes per second, but this was reduced by April's Bitcoin halving event, rising mining difficulty, and seasonal energy restrictions.
Despite a net loss of $54 million for the quarter, Galaxy noted improvement compared to the previous quarter’s $177 million loss. The firm also reported over 30% growth in operating revenue. As of September 30, Galaxy’s equity capital was reported at $2.1 billion.
Galaxy’s ongoing reorganization to become a Nasdaq-listed Delaware corporation remains on track, pending final SEC review and necessary approvals.
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