Bitcoin mining companies moving into AI data center infrastructure may be facing an excessive market sell-off, with shares now appearing oversold after October’s 35% decline, according to VanEck. The investment manager views the downturn as a temporary pricing imbalance rather than a sign that investors have abandoned the AI infrastructure business model.
In a research note released Wednesday, VanEck said shares of these companies fell an average of 35% in October as investors broadly sold AI infrastructure stocks without accounting for differences in their operations and financial structures.
The firm highlighted Bitcoin miners such as Hut 8 and Core Scientific, which are expanding into AI data center services. These businesses, described by VanEck as powered shell providers (PSPs), faced selling pressure as concerns spread from GPU rental companies such as CoreWeave.
Credit-related worries across the sector contributed to the decline, alongside broader economic and political uncertainty. These pressures included September’s stronger-than-expected U.S. inflation data and uncertainty ahead of the November midterm elections.
Powered shell providers supply electricity and physical infrastructure to GPU rental operators. Those companies have encountered higher borrowing costs as they finance expensive graphics processing units needed to expand their AI computing capabilities.
VanEck argued that electricity availability, rather than a shortage of AI demand, remains the industry’s biggest infrastructure constraint. This could strengthen the position of Bitcoin miners that already control access to substantial power resources.
The investment manager also said the current valuations of these companies appear significantly disconnected from their underlying financial fundamentals, particularly their long-term contracted cash flows.
Although GPU rental businesses, often called neocloud providers, are experiencing increased debt-servicing pressure, VanEck noted that no signed lease agreements had been canceled.
At the same time, extended delays in obtaining grid connections are making existing power capacity increasingly valuable. Bitcoin miners with established electricity infrastructure could therefore benefit as AI companies compete for limited energy resources.
VanEck believes October’s sharp correction could present an attractive opportunity for investors, rather than indicate that Bitcoin miners’ transition into AI infrastructure is losing its commercial appeal.
