Bitcoin mining companies and artificial intelligence data centers are increasingly competing for access to cheap, sustainable energy, which could trigger renewed institutional investment in the mining sector over the next decade.
AI data centers with deep capital reserves are beginning to outbid miners for power infrastructure, with more Bitcoin (BTC) miners getting “priced out” or deprioritizing mining activities, according to a July 31 research report from Bitcoin mining infrastructure provider GoMining Institutional.
Still, the flexibility of Bitcoin miners allows them to expand into more off-grid locations with a lack of high-speed internet infrastructure, giving them an advantage over AI facilities, according to Jeremy Dreier, managing director and chief business development officer at GoMining Institutional.
This battle for energy will lead to a renewed wave of institutional investment into Bitcoin mining over the next decade, Dreier said during Cointelegraph’s Chain Reaction daily X spaces show on Thursday.
“In the next five to 10 years, because of this new battle with AI, we’re going to see a new heyday for Bitcoin mining because we now have real institutional capital coming into the space.”
Institutional capital has already flowed into US spot Bitcoin exchange-traded funds (ETFs), with Dreier calling mining investments the “next step.”
Institutions want cheaper “virgin” Bitcoin
An institutional capital rotation into Bitcoin mining companies may be the next logical step as corporations investing in Bitcoin ETFs and treasury firms look to acquire cheaper Bitcoin for their balance sheets.
Related: Bitcoin briefly flips Google market cap as investors eye rally above $124K
More institutions are exploring the possibility of acquiring cheaper, “virgin” Bitcoin, instead of paying the spot prices on exchanges, said Dreier. Institutions want to get newly minted Bitcoin “cheaper than they get it from the market.”
Increasingly more institutions are inquiring about Bitcoin mining infrastructure services from GoMining in an attempt to acquire cheaper Bitcoin for their balance sheets, Dreier told Cointelegraph.
Mining a Bitcoin cost an average of $64,000 during the first quarter of 2025 and is expected to surpass $70,000 by the end of the year, which is still 70% cheaper than today’s spot Bitcoin price of over $119,050, according to a research report by TheMinerMag.
Related: BitMine targets huge $24.5B raise as SharpLink boosts Ether war chest
The battle for electricity between miners and AI data centers has seen many Bitcoin mining firms diversify operations to profit from this trend.
For example, Riot Platforms has halted its plans to expand its Bitcoin mining operations in Corsicana, Texas, to instead explore AI opportunities at the site.
Iris Energy also announced a strategic pivot toward its AI cloud business, placing a self-imposed cap on its mining fleet expansion, signaling a “major reshuffling of priorities,” according to GoMining Institutional’s report.
However, Dreier foresees numerous public miners “that have jumped over onto the AI bandwagon” to “quickly start shifting back into investing more into Bitcoin mining,” as they see the institutional capital rotation occur.
Others are doubling down on Bitcoin mining innovation. Bitcoin-focused fintech company Block Inc. introduced a new cryptocurrency mining system designed to extend the lifespan of mining rigs and lower operation costs, flashing a potential boost for miners struggling to maintain facilities, Cointelegraph reported on Thursday.
Magazine: Altcoin season 2025 is almost here… but the rules have changed
