Bitfarms' stock dropped nearly 18% after the company announced plans to completely shut down its Bitcoin (BTC) mining operations over the next two years and convert them into high-compute data centers for Artificial Intelligence (AI).
Key Points of the Transition:
- First Conversion Site: The 18-megawatt Bitcoin mining facility in Washington state will be the first to be fully converted to support AI and high-performance computing (HPC), expected to be completed by December 2026.
- CEO's Rationale: CEO Ben Gagnon stated that the Washington site, despite being less than 1% of the portfolio, could potentially generate more net operating income from "GPU-as-a-Service" than the company has ever made from Bitcoin mining.
- Winding Down: The full conversion will assist the company as it winds down its entire Bitcoin mining business across 2026 and 2027.
Broader Industry Trend:
- Bitfarms' decision mirrors a trend among crypto mining rivals. For example, IREN recently signed a multi-year $9.7 billion deal with Microsoft to provide access to its AI compute capacity.
The Opportunity for US Miners:
- Gagnon told investors that as the difficulty and cost of Bitcoin mining rise, miners are "rotating out to lower and lower cost jurisdictions" (like the Middle East, Africa, and Russia).
- He believes the "best opportunity for most miners in the United States really is this transition to HPC and AI," arguing that the US is the best market for investing in HPC and AI, whereas Bitcoin mining is "location-agnostic" and can go to cheaper, riskier, and more remote areas.
- Gagnon concluded that the best strategy is to "bring forward what should be estimated free cash flow for mining operations today into cash and reinvest those into HPC and AI."
Financial Context:
- The announcement came as Bitfarms reported its Q3 2025 earnings:
- Net Loss: A net loss of $46 million (8 cents per share), a significant increase from $24 million a year ago, and missing analyst expectations of a 2-cent loss.
- Revenue: Revenue increased 156% year-over-year to $69 million, but still missed analyst estimates by over 16%.
- Bitfarms earned 520 BTC in Q3 at an average direct cost of $48,200 each.
The news caused Bitfarms shares (BITF) to decline nearly 18% to $2.60 by the close of trading on Thursday.
November 2025, Cryptoniteuae