Bitcoin Hit $85,000. Its Miners Would Rather Rent Their Power to AI. | Edition 339

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Bitcoin miners just found a better customer than Bitcoin.

Bitcoin just had its best run in eight months — about $85,100 on Monday, up more than 30% since mid-August. You'd expect Bitcoin miners to be plugging in every machine they own. A lot of them are unplugging instead, and renting the same buildings and power lines to AI companies.

A Bitcoin mine is a warehouse of specialized computers turning electricity into lottery tickets. The machines are useless for AI. But the building around them — hundreds of megawatts of approved grid power, substations, cooling — is exactly what AI companies can't get fast enough.

Then the miners got squeezed from both sides. The 2024 halving cut their reward in half, and Bitcoin fell from around $125,000 last October to roughly half that by February. Meanwhile, AI offered long, fixed contracts paid in dollars. Hut 8, once a pure miner, signed a 15-year, $7 billion lease to host AI computing for Fluidstack — Google backstops the payments, and Anthropic is the partner the capacity is being built for. Across listed miners, CoinShares counts more than $100 billion in disclosed AI contracts.

At today's price, a megawatt of modern mining machines earns about $780,000 a year. After the power bill, a miner keeps roughly $430,000. Hut 8's AI lease works out to roughly $1.4 million per megawatt a year — already after electricity, since the tenant pays the power. About three times the money, locked in for 15 years.

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Mining pay moves almost one-for-one with the price, so the gap closes fast:

That $300,000 lead doesn't last, though. When the price jumps, switched-off machines flood back and split the same fixed prize. And around April 2028, the next halving cuts the reward in half again — at $300,000, that drags a megawatt back to about $1 million, below the AI lease. Most important of all, signed leases don't come back: Hut 8's megawatts are committed to AI into the early 2040s.

Our rough math: today's difficulty, efficient machines, 4-cent power, no build costs. Illustrative — not a forecast, and not investment advice.

For AI: old Bitcoin sites are one of the fastest ways to add AI computing, because the slowest part to get — a big grid connection — already exists. So Bitcoin's price has become a dial on AI supply. A flat Bitcoin pushes more sites toward AI; a soaring one pulls some back and makes that power pricier.

For Bitcoin: its security comes from how much computing power guards it. At roughly 900 exahashes per second, that's still enormous. But for the first time, miners have a better-paying customer for their electricity — and Bitcoin has to outbid AI to keep them.

The one-liner: Bitcoin miners were never really in the Bitcoin business. They were in the cheap-power business, and AI just became the better customer.

On the site: a live slider that runs the math at any Bitcoin price, the full sources table, and a copy-paste prompt that decodes the next Bitcoin-or-AI-power headline for you.

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— Jerry
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