Bitcoin miners have dramatically increased their debt from $2.1 billion to $12.7 billion within just one year, financing the acquisition of new mining rigs and expanding into artificial intelligence (AI) and high-performance computing (HPC) infrastructure to maintain a competitive edge in the global hashrate race, according to investment firm VanEck.
VanEck analysts Nathan Frankovitz and Matthew Sigel explain that miners are locked in what they call the “melting ice cube problem,” where failing to continuously invest in cutting-edge machinery results in losing shares of the global hashrate and, consequently, a reduced slice of the Bitcoin daily block rewards.
Historically, Bitcoin miners relied on equity financing to cover massive capital expenditures, as their revenue streams are inherently volatile and tied almost entirely to Bitcoin’s price, making debt a less common funding route. However, the rise in debt uptake signifies a strategic pivot amid evolving market dynamics.
Industry data from The Miner Mag reveals that public miners’ combined debt and convertible-note offerings surged to $4.6 billion in Q4 2024, then $200 million at the start of 2025, climbing further to $1.5 billion by Q2 2025.
Following the Bitcoin halving in April 2024, which cut mining rewards to 3.125 BTC, many miners are diversifying by repurposing electrical capacity toward AI and HPC hosting services. This transition provides predictable, multi-year contract revenues, enabling miners to access debt markets more readily, reduce capital costs, and stabilize cash flow beyond Bitcoin’s price fluctuations.
For example, Bitfarms secured $588 million through a convertible note financing to advance HPC and AI infrastructure across North America, while TeraWulf raised $3.2 billion in senior secured notes to expand its Lake Mariner data center. Meanwhile, IREN raised $1 billion in convertible notes for general corporate and operational needs.
Despite this diversification, experts emphasize that the Bitcoin network’s security remains robust. Miners continue to underpin the blockchain by validating transactions and maintaining hashrate, which safeguards the network. The shift toward AI usage is seen as mutually beneficial; AI workloads, with their cyclical demand patterns, can optimize energy use in Bitcoin mining, especially in remote or developing energy markets.
Miners are also exploring innovative ways to monetize surplus electrical capacity when AI demand is low, potentially reducing reliance on expensive backup power sources like diesel generators. This synergy between Bitcoin mining and AI offers potential capital efficiency gains and operational improvements.
Read more: https://cointelegraph.com/news/bitcoin-miner-debt-surges-ai-hpc-expansion