There are a number of Bitcoin miners that are starting to direct their computing power from mining Bitcoin to providing that same compute to companies that need that power for AI and why that’s potentially a very good thing for the price of Bitcoin.
You see in the past Bitcoin mining companies have had to follow the boom and bust cycles of Bitcoin’s price over and over again.
Price reaches new all time highs, miners update equipment, pay a lot of bills and are able to keep some Bitcoin they mine as a treasury after they’ve paid for everything.
Price starts to drop.
Miners are forced to sell off their Bitcoin reserves in order to pay off their bills and create even more downward sell pressure in the market, which then forces prices down even lower.
This is called Structural Sell Pressure and it’s been part of the Bitcoin mining industry since the invention of it and it usually creates a doom spiral and many miners go out of business because they simply don’t have the capital it needs to survive a bear market.
But now because of the growth of AI, many of these miners can use that same computing power to work to provide for all the myriad of uses for AI instead of having to keep on mining Bitcoin while the price goes down.
I heard an interview with one crypto miner who (and I’m paraphrasing here) “It’s hard to make money when your revenue is cut in half every 4 years.”
AI can help bridge that gap by providing revenue that is recurring and high margin.
Which means that Bitcoin miners are going to be much less likely to sell their Bitcoin to fund their businesses, which decreases the amount of structural sell pressure which helps create a higher floor for the price of Bitcoin and higher floor prices for Bitcoin create new all time highs later on which eventually will lead to the Million Dollar Bitcoin.