Miners Transitioning to Address Halving Challenges: JPMorgan Providing Services to AI Market
With Bitcoin's halving expected to take place in April next year, cryptocurrency miners who are currently struggling will be competing with each other at lower profits. However, analysts at JPMorgan Chase have found that some miners are leveraging the AI trend to provide different services, with revenue efficiency that rivals their mining operations.
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Cryptocurrency Mining Transforming
According to a report by The Block, analysts at JPMorgan stated in a recent report that cryptocurrency miners are now providing high-performance computing services for the rapidly growing AI market to earn rewards, with funds coming from selling mining earnings from the past few quarters.
Both cryptocurrency mining and AI development and training require advanced computer chips.
The Block reports that cryptocurrency mining company Applied Digital recently launched AI cloud services and signed a $460 million deal to provide AI cloud computing in its data centers. Additionally, another cryptocurrency mining company, Iris Energy, has relaunched its high-performance computing (HPC) services.
In addition to Bitcoin miners, Ethereum miners who have seen reduced profits due to the Ethereum consensus mechanism transitioning from PoW to PoS are also benefiting from this AI trend.
JPMorgan analysts mentioned that some Bitcoin and former Ethereum miners have conducted tests using a small portion of their GPU equipment for high-performance computing services. The tests revealed that the profit per unit of electricity consumed far exceeds the earnings from Bitcoin mining.
Although the test results are limited to a smaller scale, if profitability can be maintained on a larger scale, it will surpass Bitcoin mining revenue in the future.
As for the struggling cryptocurrency mining industry, which country offers the best prospects for these owners?
JPMorgan analysts point to Russia, as a major energy exporter, facing an energy surplus due to the impact of the Ukraine-Russia conflict. Coupled with harsh weather conditions, Russia is likely to provide lower energy costs to cryptocurrency miners.