Bitcoin Miner Debt Soars to Record $12.7 Billion in a Year

Experts note that the industry is experiencing a "melting ice cube" effect: without consistent investment, miners are gradually losing ground in the global hash rate. While the business previously relied primarily on equity capital, many market participants are now turning to debt financing due to high stock prices and volatility. According to The Miner Mag, publicly traded mining companies have issued debt and convertible bonds totaling approximately $6.3 billion since the end of 2024. In the fourth quarter of last year alone, such issuances reached a record $4.6 billion.

The report also notes that the increase in borrowing coincides with business diversification. Following the 2024 halving, many miners began using some of their capacity to host AI and high-performance computing (HPC) workloads. This segment provides a more stable revenue stream and facilitates access to credit markets.

Examples include Bitfarms, which issued $588 million in convertible bonds in October, and TeraWulf, which raised $3.2 billion through secured bonds to expand its Lake Mariner facility. IREN received $1 billion for corporate needs and working capital.

Analysts believe that the redistribution of computing power does not pose a threat to the security of the Bitcoin network. On the contrary, using excess electricity for mining increases the industry's resilience.

VanEck emphasized that mining remains an effective way to monetize excess electricity, especially in remote regions or developing energy markets. Moreover, a hybrid model, which allows for the conversion of power to AI or HPC, makes the industry more adaptable and promising.

It was previously reported that New York authorities proposed a special tax on mining due to the sector's growing energy consumption.