Bitcoin mining companies are increasingly competing with AI data centers for cheap renewable energy, which may trigger a new round of institutional investment in mining over the next decade.
According to a report by GoMining Institutional, well-capitalized AI data centers are beginning to outcompete miners in the energy infrastructure race, causing some Bitcoin miners to be 'priced out' or deprioritize mining activities.
However, the flexibility of Bitcoin mining companies allows them to expand in remote areas lacking high-speed internet infrastructure, giving them an advantage over AI facilities, says Jeremy Dreier, General Manager of GoMining.
Dreier stated on Cointelegraph's program that the energy competition will guide a new round of institutional investment into Bitcoin mining.
"In the next five to ten years, we will see a new glory of Bitcoin mining due to the new competition with AI, as real institutional capital is entering this space."
Institutional capital has flowed into U.S. spot Bitcoin ETFs, and Dreier states that mining investment will be the 'next step' for these investors.
Institutions seek cheaper 'mother coins'
As more companies explore the possibility of acquiring cheap 'mother coins', Dreier points out that an increasing number of institutions are consulting GoMining to acquire cheaper Bitcoin for their balance sheets.
In the first quarter, the average mining cost of Bitcoin was $64,000, and it is expected to exceed $70,000 by the end of the year, which is still 70% cheaper than the current spot price.
The power struggle has led many Bitcoin mining companies to diversify operations to profit from it. For example, Riot Platforms is exploring AI opportunities while pausing its business expansion in Texas. Meanwhile, Iris Energy has announced a strategic transformation shifting towards AI business, reducing mining expansion, and recalibrating priorities.
However, Dreier predicts that many public mining companies will turn back to Bitcoin mining investment due to the influx of institutional capital. Other companies are doubling down on mining innovation, such as Block Inc. launching new systems aimed at extending the lifespan of mining machines.
