Bitcoin miners are turning to new markets and banking

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Avi Felman says he’s bullish on bitcoin miners, but not strictly because of bitcoin’s potential.

With a pivot to deliver high-performance computing, or HPC, companies are finding new ways to expand their revenue stream beyond ASIC mining.

Hut 8, best known as a bitcoin mining company with facilities in Alberta, Canada and Texas, is a prime example, he says. Using its high-capacity computing infrastructure, Hut 8 recently signed a contract to provide HPC services to healthcare customers in Canada.

In a recent 1000X podcast (Spotify/Apple), the head of digital asset trading at GoldenTree talks to Jonah Van Bourg, global head of trading at Cumberlands, about revenue expansion strategy.

It’s not a matter of hardware

With the growing potential for more cash flow, one would expect mining companies to pack their ASICs for greener pastures, leaving behind the precarious crypto mining business and its profit margins at the bottom. tip of the knife.

But it’s not about chips, Felman says, it’s a whole different business.

It’s more about access to facilities and people who know the business, Felman says. Cooling, for example, is important in any high-capacity computing environment, he says. In bitcoin mining and HPC, they have everything in place.

They have people who know how to develop these services. They have the warehouses and the facilities. They have the electricity contracts.

Read more: Are You Bleeding Enough BTC to Pay $55 for Brooklyn’s Bitcoin Spa?

The actual product that is delivered to customers, Felman explains, is radically different and requires a decent initial investment. But the overall operations are very similar, he says.

Large-scale mining companies like Hut 8, Iris Energy, Hive and Cipher can reallocate facilities to deliver HPC, diversify the business and generate more revenue, Felman said. There seems to be a huge demand.

A healthier bitcoin market, to boot

Felman clarifies that today’s highly specialized ASIC hardware computers designed strictly for bitcoin mining cannot be hijacked for the purpose of delivering HPC to customers. But diversifying the services provided through their infrastructure and know-how could allow mining companies to be financially sounder, he says.

The move could also benefit the market price of bitcoin (BTC), he argues, as miners could be less pressured to sell in fearful markets. The need for mining companies to regularly sell their fresh bitcoin just to survive acts as a constant shock absorber on prices.

Miners will be liquidated less often as they become better and more robust businesses.

Van Bourg adds that it would definitely make the market healthier.

It would also tell the world, he says, that crypto has provided a series of infrastructure games that are relevant outside of just crypto.

The move indicates the presence of a growing market for specific computing facilities, Van Bourg said. Bitcoin mining technology, he says, laid the foundation for other applications that can now leverage the technology in new ways.

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