The stock prices of the two mining companies, MARA and Riot, which chose to hold Bitcoin strategies, have fallen by 20% and 36% respectively this year

Six months after the Bitcoin halving event, crypto mining companies are making choices between two different paths to survive.

Listed mining companies including MARA Holdings, Riot Platforms and CleanSpark are retaining the Bitcoins they produce, expecting them to appreciate in value. Meanwhile, more and more companies are investing more funds into data centers that power artificial intelligence applications.

Wolfie Zhao, an analyst at research firm TheMinerMag said, "As profit margins have been significantly squeezed for miners, one of the few strategies left for investors is to hold onto their mined Bitcoins betting on future price appreciation while relying on equity or debt financing. By avoiding immediate loss-selling of Bitcoin they can avoid potential losses and be prepared for profits when a bull market emerges."

The share prices of the two largest listed Bitcoin miners MARA and Riot have fallen by 20% and 36% respectively this year; both these firms are 'hodlers'.

In addition since announcing a series of contracts worth billions with AI upstart CoreWeave in January this year, Core Scientific's stock has nearly quadrupled. This miner will retrofit part of its data center to accommodate GPUs capable of generating high-performance computing power for AI applications. TeraWulf whose stock has doubled this year is also developing in the field of AI data centers.

Other bitcoin miners like Iris Energy and Bit Digital who invest more resources into AI often outperform peers who double down on holding their own bitcoins.

Paul Golding senior analyst at Macquarie Capital USA stated: "Our view is that pure bitcoin mining currently holds a place in the market as it can create economic value from growing bitcoin mining capabilities." He rates MARA Riot Core Scientific Iris Energy CleanSpark and Cipher Mining as 'outperform'.

Ethan Vera COO at Luxor Technology said: "In an environment where Bitcoin prices continue to rise this will be a very successful strategy but if Bitcoin prices plummet it will be disastrous you will continue to see negative profits they are covering up the industry's poor condition and operational status by diluting shareholder equity and buying new mining machines." (Bloomberg)