Bitcoin miners are turning to convertible debt to fund an ambitious expansion into artificial intelligence, raising roughly $11 billion over the past year as they reinvent their business models beyond crypto mining. The pivot follows April 2024’s Bitcoin halving, which cut miners’ block rewards in half and intensified pressure to find new revenue streams.
According to data from TheMinerMag, Bitcoin mining firms have completed 18 convertible-bond deals since the halving, with average deal sizes more than double those of previous years. Major players such as Marathon Digital (MARA), Cipher Mining, Iris Energy (IREN), and TeraWulf have each raised about $1 billion through individual bond offerings. Some of these bonds carried coupons as low as 0%, reflecting investors’ confidence in the miners’ long-term potential and willingness to trade immediate interest for future equity upside.
Convertible bonds—debt instruments that can be exchanged for company stock—have become an attractive financing tool as miners seek to diversify into AI-driven data-centre operations. By converting existing infrastructure and excess computing power to serve AI workloads, miners hope to offset the declining profitability of Bitcoin mining amid rising energy costs, stricter trade policies, and ongoing hardware upgrades.
Investment firm VanEck recently reported that miners’ debt has ballooned by more than 500% year over year, reaching $12.7 billion. Analysts Nathan Frankovitz and Matthew Sigel described the sector’s capital intensity as a “melting ice cube,” noting that miners are forced to invest heavily in new hardware almost every year to remain competitive as Bitcoin’s network hash rate continues to climb. The rising hash rate—representing the total computing power securing the Bitcoin network—further increases operational demands and energy consumption.
The expansion into AI reflects both a survival strategy and an opportunity. As demand for high-performance computing surges globally, miners are repurposing their facilities to power AI training and inference workloads. This shift is being watched closely by regulators and policymakers, given its potential strain on energy grids. In October, U.S. Energy Secretary Chris Wright proposed a rule that would allow data centres and miners to connect directly to power grids under the Federal Energy Regulatory Commission (FERC). The goal is to make these operations “controllable load resources,” capable of balancing supply and demand by ramping energy use up or down as needed.
Despite the risks, the ongoing wave of convertible-bond financing signals strong investor belief that Bitcoin miners can evolve into a broader class of digital-infrastructure providers. If successful, the sector could transition from purely securing blockchains to powering the next generation of AI-driven computation.
