Bitcoin Miners Raise $11 Billion in Convertible Debt Amid AI Data Center Pivot
Bitcoin (BTC) miners have raised a staggering $11 billion in convertible debt over the last year, marking a significant shift in their financing strategies. This move comes as the industry pivots towards artificial intelligence (AI) data centers, following the April 2024 Bitcoin halving that reduced the block reward by 50%. According to a report by TheMinerMag, miners completed 18 convertible bond deals during this period, with the average issue more than doubling in size.
Notable mining companies such as MARA, Cipher Mining, IREN, and TeraWulf each raised $1 billion through single bond issues, with some offerings featuring coupons as low as 0%. This signals investors’ willingness to waive interest payments in exchange for potential equity upside. The surge in convertible debt issuance is a departure from the preceding year, when most bond deals ranged from $200 million to $400 million.
Convertible bond deals from July 2024 to October 2025. Source: TheMinerMag
The mining industry’s pivot towards AI data centers is a response to revenue shortfalls following the Bitcoin halving. Miners continue to face a challenging business model, influenced by tokenomics, trade policies, supply chain issues, and rising energy costs. As a result, the industry is exploring new revenue streams, including AI data centers, to remain competitive.
Miners Face Rising Energy Costs and Hashrate War
Miner debt has surged by 500% over the last year, totaling $12.7 billion, according to a report by investment manager VanEck. Analysts Nathan Frankovitz and Matthew Sigel note that these debt levels reflect a fundamental problem in the mining industry – heavy capital expenditures on mining hardware that must be upgraded annually in some cases. Historically, miners relied on equity markets, not debt, to fund these steep capital expenditures.
Bitcoin’s network hashrate continues to rise, forcing miners to expend ever-greater computing and energy resources. In October, US Energy Secretary Chris Wright proposed a regulatory change to the Federal Energy Regulatory Commission (FERC) that would allow data centers and miners to connect directly to energy grids. This would enable these energy-intensive applications to satisfy their energy needs while acting as controllable load resources for the energy grid.
Regulatory Changes and Energy Efficiency
The proposed regulatory change aims to balance and stabilize the electrical infrastructure during times of peak demand and curtail excess energy during low demand. As the mining industry continues to evolve, it is likely that we will see further innovations in energy efficiency and sustainability. For more information on the Bitcoin mining industry and its pivot towards AI data centers, visit the original source link: https://cointelegraph.com/news/btc-mining-ai-gold-rush-convertible-bond-boom
