Bitcoin Updates: Miners' AI Investments Fueled by Debt Could Trigger a Downturn Similar to 2022
- Bitcoin miners are leveraging $12.7B in debt to expand into AI/HPC, doubling down post-2024 halving as mining rewards halved to 3.125 BTC per block. - TeraWulf's $3.2B bond and IREN/CleanSpark's $1.3B raises highlight aggressive infrastructure upgrades, with AI contracts offering "predictable cash flows" against crypto volatility. - Risks escalate as TerraWulf's $250M annual interest exceeds 2024 revenue, echoing 2022's Core Scientific bankruptcy triggered by overleveraged hardware seizures. - Investors
Bitcoin mining companies are engaged in a fierce competition for supremacy following the 2024 halving, with many turning to debt-financed growth in artificial intelligence (AI) and high-performance computing (HPC) to transform the sector. Over the past year, the industry's total debt has soared from $2.1 billion to $12.7 billion, according to
The rapid accumulation of debt is largely due to miners upgrading their facilities and seeking to benefit from the booming AI sector. Companies such as
Nevertheless, this approach comes with considerable risks. TeraWulf’s latest debt carries a 7.75% interest rate, resulting in $250 million in yearly interest payments—far surpassing its 2024 revenue of $140 million, as noted in the CoinCentral analysis. The rising cost of borrowing, combined with execution challenges, has sparked doubts about long-term viability. The MinerMag cautions that while diversifying into AI and HPC reduces some crypto-specific threats, excessive leverage could lead to a repeat of the 2022 crisis, when Core Scientific declared bankruptcy after lenders repossessed underperforming mining equipment, as discussed in
On the other hand, investors are responding positively to these strategic changes. The CoinShares Bitcoin Mining ETF (WGMI) has climbed 160% so far this year, reflecting investor optimism for miners evolving into hybrid infrastructure providers, as mentioned in the CoinDesk report. TeraWulf’s share price alone has soared 170% in 2025, outpacing Bitcoin’s 10% increase, according to
Despite the optimism, some doubts remain. Matthew Sigel from VanEck warns that the "melting ice cube problem"—where outdated hardware causes miners to lose hashrate—remains unless there is ongoing investment, a concern raised by Cointelegraph. Miners are now under pressure to demonstrate that investments in AI infrastructure can be translated into revenue, while balancing the needs of both Bitcoin mining and high-margin computing services.
As competition for hashrate intensifies, the industry's future will depend on its ability to profit from AI resources without undermining Bitcoin’s network security. Although the current strategy seems to be yielding results, the road ahead is filled with both financial and operational hurdles, as emphasized by CoinCentral.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
You may also like
ETFs and Exchanges Now Hold 1.69 Million Bitcoin
REDFi's Crypto Conference Addresses Latin America's Inflation Crisis and Banking Shortages Through Blockchain Innovation
- REDFi, a Panama-based crypto platform, sponsors Blockchain Jungle 2025 in Costa Rica, focusing on bridging traditional finance and blockchain innovations. - The conference addresses Latin America's hyperinflation and banking gaps through DeFi, stablecoins, and cross-border payment solutions, targeting 6,000+ attendees from 50+ countries. - Argentina and Venezuela's reliance on dollar-backed stablecoins highlights the region's potential as a crypto hub, supported by Panama and Costa Rica's favorable regul

Hyperliquid News Today: DeFi Perpetuals Reach $1.24 Trillion While Hyperliquid, Aster, and Solana Compete for Leadership in Trading
- DeFi perpetual contracts hit $1.241T in 30-day volume (Oct 2025), driven by Hyperliquid (60% DEX share), Aster, and Solana's Percolator. - Hyperliquid dominates with $319B July volume, 35% blockchain revenue, and aggressive HYPE token buybacks absorbing 5.64% circulating supply. - Solana counters with Percolator DEX to challenge Hyperliquid, while Aster maintains $145B monthly volume despite user poaching concerns. - Market resilience seen after $20B liquidation event; DeFi perps open interest hits $16.8

ZEC Surges 21.6% in Robust 24-Hour Rally as Market Sees Widespread Gains
- ZEC surged 21.6% in 24 hours to $329.36 on Oct 26, 2025, driven by improved market sentiment and speculative positioning. - The rally reflects broader investor confidence as macroeconomic uncertainties ease and global markets stabilize. - Technical indicators suggest continued upward momentum, with moving averages aligned and RSI in a healthy range. - A backtest analyzing 15%+ daily gains aims to validate if such spikes reliably precede further gains in ZEC's price trajectory.