The AI Data Center Crunch: Is Your Bitcoin Mining Portfolio Taking a Hidden Hit?

Wall Street's latest darling is cannibalizing the hardware that powers crypto's backbone.

The Great Compute Squeeze

Artificial intelligence demands processing power—tons of it. Data centers are snapping up high-performance chips and specialized hardware at a breakneck pace, creating a supply chain vortex. This isn't just a problem for tech giants; it's sending shockwaves through the Bitcoin mining ecosystem, which relies on similar silicon real estate.

Depreciation's Double-Edged Sword

For publicly traded mining firms, equipment depreciation is a core accounting metric. When next-gen AI hardware floods the market, it doesn't just raise procurement costs—it can accelerate the book-value decline of existing mining rigs. That hits balance sheets, potentially spooking investors who focus on traditional financial metrics over pure hash rate. It's a classic case of Wall Street valuing the ledger over the network it secures.

Beyond the Balance Sheet

The real pressure isn't just on paper values. It's operational. Rising hardware costs and increased competition for energy contracts—often shared with data centers—squeeze margins. Miners are forced to innovate, seeking stranded energy and more efficient ASICs, just to stay in the black while AI companies burn cash on speculative chatbots.

A Hedge in the Machine?

Some mining giants are pivoting, offering their infrastructure for AI compute loads during off-peak hours. This hybrid model could turn a vulnerability into a revenue stream, blurring the lines between these two power-hungry industries. The smart money isn't picking a side—it's betting on the infrastructure both will fight over.

Watch the hashrate, not just the headlines. While analysts fret over quarterly depreciation schedules, the Bitcoin network grinds on—proving, once again, that real value often accumulates in the shadows of a spreadsheet.

BTC mining stocks rise on AI data center promises

Among the top 10 BTC mining stocks, eight were preparing to end the year in the green, with gains ranging from 12% for Core Scientific to 328% for Iren Limited. 

Separate stocks also outperformed in short-term timeframes. Hut 8 was among the top performers, gaining 46.73% in the past month and over 24% in the past week alone. 

Hut8 is up 112% in 2025, rising from the $12 range in March to over $50. Hut8 is yet to recover its peak above $72 from 2021, when the shares ROSE due to intrinsic crypto enthusiasm. The company’s yearly success reflected the sale of mining assets to American Bitcoin, Eric Trump’s pure play mining company. 

The other prominent mover in 2025 was IREN. The shares peaked above $66 in November and backtracked, but retained some of their gains at over $42. IREN also had a year-end rally, adding 24% in the past five days. 

The recent IREN price rally followed a progress report on its Childress, Texas data center. The flagship operation is preparing to deliver high-energy compute, with Microsoft as one of its major clients. The company prepares to launch two 100mW facilities with GPU superclusters. 

Are BTC mining stocks affected by AI data center depreciation?  

The biggest problem for BTC mining stocks may be the depreciation schedule of their AI spending. 

In total, the AI sector has planned significant spending in the coming years. One of the big problems is that companies are using 3-5 year depreciation cycles to write off the initial investments. 

The immediate problem is that depreciation may quickly overcome the real revenues of AI companies. BTC mining stocks may have a slight advantage in building smaller data centers. The companies also worry that the real useful life of chips may be much lower compared to the write-off period. 

The AI chip bubble has been noted by investor Michael Bury, also pointing attention at the low useful life of chips and the potentially inflated depreciation periods. 

As a result, BTC mining stocks are not a proxy or an offset of the crypto market, but a subset of AI mining stocks. For some of the companies, crypto mining is still a part of operations, though at a much lower rate of investment and growth.

Claim your free seat in an exclusive crypto trading community - limited to 1,000 members.