Crypto Miners Adjusting to New Regime, Leaning Into AI
Earlier this year, bitcoin went through its latest quadrennial halving, which reduces the rewards accrued by miners of the largest cryptocurrency, thus boosting its scarcity. Increased difficulty in the bitcoin mining process can lead to higher costs in the form of increased energy output and lower profits due to the reduced rewards. On the surface, that sounds ominous for crypto miners, including those residing in the VanEck Digital Transformation ETF (DAPP), but some of those companies are surviving and thriving in the post-halving world thanks in large part to artificial intelligence (AI).
Due to the computing power required by AI, crypto miners, including DAPP holdings, have core competencies needed to further the emerging technology.
Due to the computing power required by AI, crypto miners, including DAPP holdings, have core competencies needed to further the emerging technology.
Crypto Miners Evolution Is Essential
AI presents cryptocurrency miners with a platform for not only diversifying their revenue streams, but evolving with the times as well â both of which are critical at a time when being a pure play crypto mining entity is less lucrative.
âJefferies said North American publicly traded mining firms minted a smaller share of new bitcoin in August compared to July, falling to 19.9% of the total network. Theyâre still spending on equipment upgrades, meaning efficiency is improving but economics are getting worse,â reports MacKenzie Sigalos for CNBC.
For its part, DAPP has been sturdy on a year-to-date basis, gaining almost 5%. While thatâs not a market-beating performance, it is a testament to the exchange traded fundâs diversity. Said differently, DAPP isnât entirely dependent on crypto miners and thatâs a positive as the industry grapples with increased difficulty and reduced profitability in mining bitcoin.
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