According to Avi Felman, the head of digital asset trading at GoldenTree, the expansion of bitcoin miners’ revenue streams goes beyond the potential of bitcoin itself, as they shift their focus to high-performance computing (HPC) and enter new markets through partnerships like Hut 8, which recently secured a contract to provide HPC services to clients in Canada’s health sector, as discussed in a recent podcast featuring Jonah Van Bourg, Cumberland’s Global Head of Trading.
The hardware is not the main focus.
Given the increasing opportunities for higher revenue, it would be reasonable to anticipate mining companies to abandon the volatile crypto mining industry and its margin-sensitive profits by relocating their ASICs to more lucrative ventures, though the language should be specified after the “` when writing code.
According to Felman, the focus is not on the chips themselves; instead, he emphasizes that “it’s a completely different business.”
Felman suggests that what holds greater significance is having access to the facilities and expert personnel who understand the nature of the business. In every high-capacity computational setting, such as bitcoin mining or HPC, appropriate cooling is a vital aspect, and both industries ensure that their infrastructure supports this requirement.
“They have the people that know how to build out those services. They have warehouses and facilities. They have the power contracts.”
Felman clarifies that the product provided to customers is notably distinct, necessitating a considerable upfront expenditure. Nevertheless, he asserts that the general operations are quite similar.
Felman states that prominent mining companies such as Hut 8, Iris Energy, Hive, and Cipher have the ability to adapt their facilities to offer high-performance computing (HPC) services. This diversifies their business and allows them to generate additional revenue. Felman says. “It seems like there’s a tremendous amount of demand.”
In addition, a more robust bitcoin market.
Felman explains that the existing ASIC hardware, which is specifically designed for mining Bitcoin, cannot be repurposed for offering HPC services to clients. However, he suggests that mining companies could achieve financial stability by diversifying their services using their infrastructure and expertise.
According to Felman, this shift could have a positive impact on the market price of Bitcoin (BTC) since miners would feel less compelled to sell during periods of market fear. The continuous necessity for mining companies to sell their newly-mined bitcoin to sustain their operations acts as a persistent deterrent to price improvement.
“Miners will get liquidated less often as they become better and more robust businesses.” Van Bourg adds, “It would make the market healthier, for sure.” “It would also tell the world,” he says, “Crypto has provided a series of infrastructure plays that are relevant outside of just crypto.”
Van Bourg suggests that this development signifies the emergence of an expanding market for specialized computation facilities. He believes that the technology originally developed for Bitcoin mining has paved the way for other applications, allowing for innovative uses of the technology.
