How Bitcoin miners’ AI push will send price to $200,000: Bernstein

Bitcoin’s price gains have an unlikely driver ― artificial intelligence.

Specifically, according to Bernstein analysts, AI data centres powered by Bitcoin mining infrastructure will help cushion any pricing blows from macro factors.

They maintain their bullish outlook for Bitcoin’s price to reach $200,000 by the end of next year.

In an investor note, Bernstein highlighted how prices will gain, driven by infrastructure partnerships — where miners retrofit their hardware for AI data centres.

The report even estimated that 20% of Bitcoin miner’s power capacity would pivot to AI in the next three years.

Bernsterin expects Bitcoin to reach $500,000 by the end of 2029, and hit above $1 million by 2033, the Bernstein report said.

Renting hardware to AI data centres would provide downside protection for mining firms against Bitcoin price volatility.

Volatility is not the only headache for miners.

Their biggest operating expense is energy.

The energy market is also prone to price fluctuations and miners have felt the impact.

This year alone, Bitcoin mining cost has swung sharply between $40,000 at its lowest level in March to a peak of $84,000 in June, based on figures from MacroMicro, an economic data platform.

Larger Bitcoin miners try to dampen the impact by negotiating so-called competitive pricing regimes that may include locked-in contracts with energy providers that span several years.

That practice also makes Bitcoin miners an attractive proposition for emerging AI data centres for whom energy is also a major operating cost.

The Bernstein report said Bitcoin miners have been ahead in the power interconnection queue between 2019 and 2021.

A CoinShares report from 2019 once described Bitcoin miners as increasingly becoming “buyers of last resort” from energy providers in areas previously deemed uneconomical for other large-scale consumers.

“This access to ‘ready’ power, with strong Bitcoin data centre capabilities, makes Bitcoin miners attractive partners to AI cloud providers or AI startups, looking to cut time to market and build resilient high-performance computer clusters,” the report said.

Osato Avan-Nomayo is our Nigeria-based DeFi correspondent. He covers DeFi and tech. To share tips or information about stories, please contact him at osato@dlnews.com.