Bitcoin Miners Surge Following Microsoft’s $17.4B AI Bet

Crypto mining stocks experienced a significant jump on Tuesday after Nebius Group announced a five-year agreement to supply Microsoft with graphic processing units valued at $17.4 billion. This deal, aimed at bolstering Microsoft's artificial intelligence infrastructure, sparked investor enthusiasm for companies with large-scale computing power, including bitcoin miners.

Caption: (Shane McLendon/Unsplash)

Key Highlights from the Rally

• Bitfarms (BITF) led the gains with a rise of 22%, while other major players like Cipher Mining (CIFR) saw a 20% increase.
• IREN (IREN), Hut 8 (HUT), Riot Platforms (RIOT), and TeraWulf (WULF) posted gains in the mid-teens percentages.
• In contrast, Bitcoin itself declined by about 1% to $111,100 over the past 24 hours, highlighting a shift in investor focus from bitcoin's price to the potential of mining infrastructure in the AI boom.

The Shifting Reality of Bitcoin Mining

For years, mining profitability was largely dictated by bitcoin's four-year halving cycle, where block rewards are cut in half. However, this rhythm no longer dominates, leaving companies exposed to challenges like surging power costs, relentless hardware production, and intensifying competition. Hardware makers like Bitmain continue to expand, adding pressure to an already crowded field.

At the same time, AI is reshaping the business model. Miners with large energy footprints and advanced computing infrastructure are exploring ways to lease capacity to hyperscalers or pivot toward data center services. The Nebius-Microsoft deal underscored how valuable GPU access has become and why markets are rewarding miners with scalable infrastructure.

Interestingly, MARA Holdings, which has positioned itself more as a bitcoin treasury company rather than a high-performance computing player, was the weakest performer with only a 4% gain, further emphasizing the trend towards AI-driven valuations.