Investors who actively follow the cryptocurrency space and related mining equities know about an emerging theme. And that is that miners diversify their revenue streams by leveraging their technological capabilities for AI purposes.
That theme is still nascent. But it’s already providing tangible benefits to ETFs like the CoinShares Valkyrie Bitcoin Miners ETF (WGMI). The actively managed fund is higher by almost 13% over the past month and nearly 31% YTD. While those impressive statistics are attributable in large part to bitcoin’s stellar run this year, WGMI components arguably deserve more credit. with the credit being the strides some have made in the worlds of AI and hypercomputing.
Discerning crypto equity investors are monitoring WGMI holdings’ AI plans for credible, simple reasons. First, AI is young and growing. With agentic AI — the next iteration after generative — gaining steam, there’s increasing room for WGMI components to assert themselves in AI. Second, AI gains made by crypto miners diversify those companies’ revenue streams. That makes them less dependent on digital currency fluctuations.
Two of WGMI’s biggest holdings, Iren (IREN) and Cipher Mining (CIFR), are already strutting their AI stuff. For example, when Iren delivered quarterly results in late August, the company told analysts and investors they landed Nvidia Preferred Partner status, procuring $96 million in financing from the chipmaker so that it can bolster its fleet of Nvidia-made graphics processing units (GPUs).
“The financing is structured as a 24-month lease and represents 100% of the purchase price, with lease payments calculated utilizing a high single digit interest rate. The B300 GPUs are funded from existing cash, with further financing workstreams underway,” according to an Iren statement.
The Australian company formerly known as Iris Energy said it’s racing to meet AI cloud computing demand. That confirms the need for Nvidia GPUs and the potential value of the partnership with a company known as the leader in AI semiconductors.
Cipher Mining is making high-performance computing (HPC) strides via its Black Pearl Phase 2. Management highlighted such on its second-quarter earnings call last month. That project could diversify the firm’s top line. It could also act as a long-term driver of share price gains for the WGMI holding.
“We are moving forward with the construction of Black Pearl Phase 2, which envisions 150 megawatts of infrastructure that is designed to support both hydro Bitcoin mining and HPC compute applications simultaneously,” CEO Rodney Tyler Page told analysts.
