VanEck says bitcoin miners with AI pivot look oversold as grid access gains scarcity premium

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Bitcoin miners AI pivot oversold

Highlights

VanEck notes bitcoin miners pivoting to AI, such as Hut 8 and Core Scientific, are oversold due to a broad October selloff unrelated to their fundamentals.
Contagion fears and rising AI debt yields from GPU rental firms like CoreWeave are pressuring miners, with added macro risk from a hot September CPI and political uncertainty.
VanEck asserts power capacity is the key constraint in AI computing, creating a scarcity premium for miners’ existing grid access and supporting their long-term cash flow value.

October selloff hits AI-linked mining operators

As reported by CoinDesk, citing VanEck in a note on Wednesday, bitcoin miners that pivoted to artificial intelligence data infrastructure, including Hut 8 and Core Scientific, are being swept into a broader selloff that does not reflect their underlying business fundamentals.

The investment manager says investors are treating companies across different parts of the AI infrastructure chain as a single trade. It describes the miners as powered shell providers, or PSPs, and says contagion fears from GPU rental companies such as CoreWeave are weighing on the group.

VanEck adds that credit concerns are spreading to PSPs alongside macro pressures, including a hotter-than-expected U.S. consumer price index reading for September and uncertainty ahead of the November midterm elections. GPU rental companies, also described as neoclouds, are facing higher AI debt yields as they finance expensive chips.

Power constraints support long-term value

VanEck argues that the key bottleneck in AI compute remains power capacity rather than demand. It says no signed leases have been canceled, despite pressure on debt service costs among GPU rental companies.

The firm says the power capacity controlled by these miners is the binding constraint on AI compute and supports the value of their long-term contracted cash flows. It also argues that long backlogs for grid connections are creating a scarcity premium for energy capacity that bitcoin miners already have in place.

On that basis, VanEck says current valuations look significantly disconnected from fundamentals and that the October rout may represent an attractive entry point, rather than a collapse in the investment case for miners shifting into AI infrastructure.

In our earlier coverage of U.S. AI data center expansion, we examined how soaring financing costs, construction delays, and grid limitations are making only a fraction of planned projects look achievable. We also noted that tightening capital conditions and cost overruns are undermining investor confidence, while power availability and local opposition are increasingly becoming the binding constraints on new capacity.

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