The fall in stocks linked to bitcoin mining reached 35% in October. In a note published Wednesday, VanEck believes that this decline reflects a misinterpretation of the sector, rather than a rejection of its shift towards artificial intelligence. The manager considers that investors confuse companies with different activities. According to him, this reaction creates a gap between stock prices and the financial prospects of the players concerned. The sector is also seeking to gradually diversify its income from now on.
In brief
- Shares of Bitcoin mining companies fell 35% on average during October.
- VanEck attributes this correction to fears of contagion between miners, energy providers and GPU rental companies.
- Power connection delays reinforce the strategic value of energy infrastructure owned by miners.
- No lease agreements signed by GPU rental companies have been canceled, according to VanEck.
VanEck sees dislocation after Bitcoin miners fall
Mining companies engaged in dedicated AI data centers have come under heavy pressure for bitcoin. VanEck says their stocks lost 35% on average during October. The manager attributes this decline to the consolidation of companies with different economic models. This reading ignores their respective activities.
Among the players involved are bitcoin miners who are developing infrastructure for AI. VanEck cites in his note released Wednesday Hut 8 and Powered Shell Providers, or PSP. These companies provide power to companies that rent graphics processing units, or GPUs. However, they are subject to concerns linked to the financial situation of these rental companies.
Pressure has spilled over from CoreWeave, which is facing high costs. Credit fears hit PSPs, while yields on AI-linked debt rose. VanEck mentions a better-than-expected US consumer price index in September. Uncertainty ahead of the November election has heightened caution around bitcoin.
Energy remains an asset for Bitcoin miners
For VanEck, the main limit to the development of AI-related computing remains access to electricity. A key factor is the energy power controlled by bitcoin miners. PSPs thus play a role with GPU rental companies. This position could support their long-term contracts, despite financial stress.
VanEck points out that GPU lessors incur high costs to finance their chips. However, no signed rental agreement was canceled, according to his note. This data distinguishes financing difficulties from a drop in demand. For bitcoin miners who have invested in energy, contractual commitments remain central.
Connection delays reinforce the scarcity of available capacities. Bitcoin miner infrastructure can meet the needs of the centers. VanEck judges that prices are moving away from fundamentals, given long-term contractual cash flows. The October drop therefore does not necessarily call into question this model.
What happens next will depend on their ability to transform contracts into sustainable income. If energy needs and existing agreements continue, investors could revisit certain valuations. Conversely, persistent financing costs could weigh on the sector. For bitcoin, the link between energy, AI and credit will remain decisive.
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