According to Cointelegraph, Bitcoin mining companies are increasingly competing with artificial intelligence (AI) data centers for access to affordable and sustainable energy. This competition is expected to drive renewed institutional investment in the Bitcoin mining sector over the next decade. AI data centers, backed by substantial capital reserves, are beginning to outbid Bitcoin miners for power infrastructure, leading to some miners being "priced out" or deprioritizing their mining activities. This information comes from a July 31 research report by Bitcoin mining infrastructure provider GoMining Institutional.
Despite these challenges, Bitcoin mining firms possess the flexibility to expand into off-grid locations that lack high-speed internet infrastructure, providing them with a strategic advantage over AI facilities, as noted by Jeremy Dreier, managing director and chief business development officer at GoMining Institutional. Dreier predicts that this growing competition for energy resources will lead to a new wave of institutional investment in Bitcoin mining over the next decade. He shared these insights during Cointelegraph’s Chain Reaction daily X spaces show, emphasizing that the next five to ten years could mark a new heyday for Bitcoin mining due to the influx of institutional capital.
Institutional capital has already begun flowing into U.S. spot Bitcoin exchange-traded funds (ETFs), and Dreier suggests that mining investments could be the next logical step for these investors. Corporations investing in Bitcoin ETFs and treasury firms are exploring the acquisition of cheaper "virgin" Bitcoin, which is newly minted and not yet circulated on exchanges. This approach allows institutions to acquire Bitcoin at a lower cost than the current market price. Dreier mentioned that more institutions are inquiring about Bitcoin mining infrastructure services from GoMining to obtain cheaper Bitcoin for their balance sheets.
The cost of mining a Bitcoin averaged $64,000 in the first quarter of 2025 and is projected to exceed $70,000 by the end of the year. This cost remains significantly lower than the current spot Bitcoin price of over $119,050, according to a research report by TheMinerMag. The competition for electricity between miners and AI data centers has prompted many Bitcoin mining firms to diversify their operations. For instance, Riot Platforms has paused its plans to expand Bitcoin mining operations in Corsicana, Texas, to explore AI opportunities at the same site. Similarly, Iris Energy has announced a strategic shift toward its AI cloud business, imposing a self-imposed cap on its mining fleet expansion, indicating a major reshuffling of priorities.
However, Dreier anticipates that many public miners who have ventured into AI will soon shift back to investing more in Bitcoin mining as they observe the institutional capital rotation. Meanwhile, some companies are doubling down on Bitcoin mining innovation. Bitcoin-focused fintech company Block Inc. has introduced a new cryptocurrency mining system designed to extend the lifespan of mining rigs and reduce operational costs, potentially benefiting miners struggling to maintain their facilities.
