GM. This is Milk Road, the crypto newsletter that hits harder than your 7 AM alarm on a Monday.
Some say the days of altcoin season are over.
Others are still waiting for it to begin.
But here's the thing: it's already happening. It just looks a little different this time.
If you’ve only been watching token prices, it might feel like nothing’s happening.
👉 But beyond the tokens, there’s been a quiet rally in crypto-linked stocks that’s hard to ignore.
The first wave of momentum hit companies like Robinhood or Circle, names that are tightly tied to the growth of crypto adoption and stablecoins.
We caught that wave early, and it paid off. Robinhood alone has jumped over 300% in our portfolio.
Now, there’s another shift happening.
✍️ Bitcoin miners are starting to reinvent themselves, branching into AI infrastructure and building out massive data centers to power the next tech boom.
The numbers don’t lie. Take a look at the chart below to see how some of these players have been performing lately.
The companies shown above are well-known bitcoin miners listed on Nasdaq.
You can see how they've performed since the sharp pullback in April.
Mid to high triple-digit returns are strong by any standard.
It'd be very hard to find any other sector that has outperformed these lately, which really makes you stop and think, why is that?
The market is starting to realize that bitcoin miners have a big advantage.
👉 With existing facilities and grid connections already in place, they're in a strong spot to shift toward powering the massive wave of AI growth.
We’ve already covered this in more detail here and here.
In today’s report, we’re taking a closer look at these bitcoin miners to understand the economics behind their business and what’s driving this shift:
- Are these bitcoin miners actually profitable?
- How much more do they earn as an AI data centre vs. mining Bitcoin.
- How quickly can this AI pivot drive increased profits.
- The things you should consider before investing into any of them.
- And finally, which names are we most confident in?
By the way, if you're wondering why Galaxy hasn't come up yet, it's because GLXY isn't a pure bitcoin miner.
But don’t worry, we’ll cover it later when we break down and compare all the key players.
Alright, let’s dive in.
BITCOIN MINING IS TOUGH
Let’s start with the basics: what is bitcoin mining, anyway?
Bitcoin runs on a proof-of-work system.
This means miners need to perform actual computational work to earn bitcoin rewards.
These rewards are built into the system and get cut in half roughly every four years.
Right now, miners earn 3.125 BTC for each block they successfully mine. The next halving is expected in April 2028, and this halving cycle will continue until all 21 million bitcoins are mined, which should happen around the year 2140.
So what exactly do miners do to earn these rewards?
In simple terms, they solve a puzzle.
They use specialized machines called ASICs, built specifically for mining bitcoin. These machines run countless guesses per second, trying to find the right solution for that “puzzle”.
The first miner to get it right wins the reward.
In the short term, mining can come down to luck.
👉 But over time, rewards even out and tend to match a miner’s share of the total network hash rate, which is basically the combined power of all miners around the world.
Here is the chart of Hashrate overtime.
It is up only. And the formula is simple: The bigger your share, the more BTC you're likely to earn.
But bitcoin mining is actually a tough and competitive business:
- Powering these ASICS requires a significant amount of energy, which ideally comes from cheap electricity.
- The business also demands heavy ongoing investments to upgrade to newer, more efficient ASIC machines to stay competitive.
- And, of course, bitcoin’s price is very volatile and hard to predict in the short to medium term.
When you add the fact that rewards get slashed in half every four years, it becomes even harder just to survive.
👉 Miners are constantly fighting tighter margins, and only the most efficient and well-established players are able to survive long term.
The chart below shows the average cost to mine one bitcoin. It gives a clear picture of how much pressure miners are under and why efficiency matters so much in this space.
The chart shows an average cost of around $114K to mine one bitcoin, while the current price of bitcoin is about $90K. So on the surface, it doesn’t even look profitable right now.
But here’s the catch: there’s no single, reliable number for the cost of mining one bitcoin.
✍️ It varies widely from miner to miner, depending on factors like energy prices, hardware efficiency, location, and how well their operations are run.
What sometimes happens is that some bitcoin miners only turn on their machines when it’s actually profitable to do so. That decision mostly comes down to two key factors:
- The price of bitcoin: the higher it is, the more likely mining becomes profitable.
- The network hash rate: the lower it is, the more likely mining becomes profitable.
When prices drop or competition gets too intense, some miners shut down to cut losses and wait for better conditions.
But as we said, rewards are random in the short term, which can make mining feel like a gamble for anyone.
That’s exactly why many miners join mining pools today as they help smooth out the randomness and provide more steady rewards for both big and small players. 😉
In the end, bitcoin mining is really about two things:
- How cheap your energy is.
- How efficiently you can turn that energy into hash rate using ASICs.
👉 Right now, most miners are running close to breakeven and often showing negative free cash flow.
That’s because nearly all of their earnings go straight back into the business:
- buying new ASICs.
- upgrading cooling systems.
- and covering other capital expenses.
So it’s no surprise that many of them are now exploring or shifting toward the AI space.
It's not just that AI is the next big thing. The real story is that bitcoin miners already have a head start over most of the competition.
WHAT MAKES BITCOIN MINERS AN ATTRACTIVE AI PLAY RIGHT NOW
The real bottleneck for AI isn’t GPUs anymore. It’s energy.
We’ve already covered this, so take a look at this report if you haven’t yet.
Here’s the quick version. Energy demand hasn’t really increased in decades. Because of that, there was little reason to upgrade the grid or invest in new sources.
But with the AI boom now in full swing, the demand for energy is exploding. And that’s starting to expose some serious gaps in the system.
You might be thinking, "Well, big tech has deep pockets. Can’t they just build their own data centers?"
Yes, they can. But the real issue is time.
These companies will need massive, working data centers very soon. And building from scratch takes years. Just getting approval for a grid connection can stretch the timeline past five years.
👉 This is where bitcoin miners have a major edge. They already have fully operational setups, complete with:
- Massive facilities with serious cooling systems already in place.
- Fast, stable fiber internet connections.
- Direct access to energy, often at scale.
So now it’s clear why bitcoin miners are in such a strong position, unlike almost anyone else.
We’re already seeing some of the early movers in the AI data center space locking in major deals with giants like Google or Amazon.
✍️ They’re securing hundreds of millions, sometimes even billions, to deliver the infrastructure that’s urgently needed.
Great, we hope you’re on board now and see why bitcoin miners could end up being a really big deal in this next wave of AI.
The next question that naturally comes up is this: how do you spot the best ones?
Sidenote: This bitcoin-miner-to-AI pivot isn’t happening in a vacuum. It’s part of a much bigger structural issue across the AI economy; a looming shortage of power and grid infrastructure in the U.S..
If you want to learn more about that bigger picture, tomorrow we are publishing the first ever Milk Road AI PRO Report, and it will not be paywalled. Sign up here to get it straight to your inbox!
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WHAT’S LEFT INSIDE? 👀
- How we spot the top performers in this trend.
- The 2 winning strategies every successful AI company uses.
- A side-by-side look at 4 major players in the game.
- Our best pick for this trend.
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