Executive Summary
The Story So Far
Why This Matters
Who Thinks What?
Bitcoin mining company stocks experienced a significant downturn on Monday, October 20, extending a correction that began the previous week, despite a months-long rally fueled by strategic pivots into Artificial Intelligence (AI) and High-Performance Computing (HPC). Many of the sector’s largest players saw double-digit percentage losses, signaling a sharp reversal for the previously surging cohort.
Market Performance
Bitfarms led the declines with a 27.1% drop, followed closely by Hut 8 (-25.2%), CleanSpark (-20.6%), Cipher Mining (-19.5%), Hive (-19.4%), IREN (-18.5%), and TeraWulf (-12.7%). While Riot (-9.8%), Bitdeer (-9.5%), Core Scientific (-7.4%), and MARA (-6.8%) experienced less severe losses, no major bitcoin mining stock was spared from the day’s selloff.
This recent drawdown follows a substantial rally over several months, largely driven by these companies’ initiatives to expand into AI and HPC business lines. Despite the sharp daily losses, the majority of these bitcoin mining stocks still show double-digit gains on a monthly basis.
Strategic AI Pivots and Fundraising
Core Scientific, an early mover in the bitcoin miner AI race, is currently awaiting a shareholder vote on its proposed all-stock merger with CoreWeave. Other companies like IREN, TeraWulf, Hive, and Cipher Mining have also emerged as significant contenders, either by securing deals with hyperscaler-backed AI tenants, developing their own cloud compute services, or signing agreements with governments for HPC workloads.
To finance these ambitious AI pivots, many companies are aggressively fundraising. In the past week alone, TeraWulf closed a $3.2 billion convertible note, marking the largest ever for a bitcoin miner, while Bitfarms finalized a $500 million note.
Analyst Outlook
Amidst these market dynamics, JonesResearch recently issued hold ratings for Cipher, IREN, MARA, and CleanSpark. The firm also assigned buy ratings to Hut 8, TeraWulf, and Riot, citing anticipated tailwinds from AI infrastructure development and growing investor interest in the AI sector.
Industry Outlook
The recent stock market correction for bitcoin miners highlights the volatility inherent in the sector, even as companies pursue diversification into high-growth AI and HPC markets. While short-term pressures led to significant daily losses, the underlying strategic shifts and substantial capital raises underscore a longer-term industry transformation.
