CoinShares: Data Center Bans Could Boost Bitcoin Miners' Power Assets

CoinShares says restrictions on new data center construction could make Bitcoin miners' existing power assets more valuable, not less. The digital asset manager's second quarter Bitcoin mining report lands at a moment when public resistance to new facilities is rising and grid connection delays now exceed five years for many projects.

James Pellevoizin, the analyst behind the findings, said concerns about electricity prices, water consumption and the influence of Big Tech have increased opposition to new builds. Existing mining sites face fewer obstacles. They already hold power contracts and grid connections — the scarcest assets in the sector.

An NBC News exit poll underscores the political shift. It found 56% of voters considered AI and data centers a crucial or major factor in their congressional vote.

How wide is the valuation gap?

It is wide, and getting wider. CoinShares found that facilities entering service in the PJM region take more than seven years on average to connect. Fully leased AI data centers have been valued at approximately $27 million per megawatt in recent transactions. Some publicly traded miners holding energized but unleased capacity trade at less than $3 million per megawatt.

That spread comes with a catch. Converting mining infrastructure into facilities suitable for AI computing costs between $8 million and $15 million per megawatt. Secured tenants and financing are essential.

The market has already picked sides. Pellevoizin said investors increasingly distinguish miners with signed AI hosting agreements from companies relying on future development plans. CoinShares' research found miners with contracted AI or high performance computing capacity traded at an average of 12.9 times forward sales, against 3.7 times for miners without contracts.

What happened after the midterms?

The distinction became apparent following the midterm elections, when Bitcoin mining and data center stocks sold off sharply. Cipher Digital fell approximately 20% last Wednesday. Hut 8 declined around 23%. TeraWulf lost less than 7%, according to market data reported by Unchained.

Riot Platforms moved the other way. It gained around 10% the same day after announcing a $28 billion, 15-year AI data center lease covering 910 megawatts at its Corsicana campus in Texas.

The election also raised questions about construction in Texas itself. Governor-elect Gina Hinojosa has proposed pausing new data center approvals until lawmakers establish additional protections for electricity consumers and local communities.

The exposure is concentrated. According to Reuters, Goldman Sachs estimates that states facing potential restrictions account for approximately 45% of planned US data center capacity, with Texas representing about a quarter. Analysts at Jefferies estimate roughly 13 gigawatts of announced Texas data center projects could be at risk from tighter permitting rules. Existing projects with secured approvals may be better positioned.

Bernstein reacted by lowering price targets on seven Bitcoin mining companies by approximately 35% to 54%, citing financing conditions and uncertainty around Texas data center development.

What does this change for miners' revenue?

Pellevoizin said the market is increasingly focused on how quickly miners can convert contracted capacity into revenue. The numbers explain why. CoinShares identified more than $100 billion in disclosed AI and high performance computing backlog across covered mining companies, compared with approximately $1.1 billion in annualized revenue.

Of more than 4 gigawatts of contracted capacity, only around 550 megawatts were generating billable revenue at the time of the report. Core Scientific had approximately 437 megawatts billing by mid-July. Rental payments at Cipher's Black Pearl facility began in August.

The backlog-to-revenue ratio is the sector's core operational challenge. Signed leases move valuations. Billable megawatts move cash flow.

CoinShares itself has adapted to the convergence. In August it renamed its WGMI fund the Bitcoin Mining and Digital Power ETF, reflecting the growing overlap between Bitcoin mining, AI computing and power infrastructure.

What comes next?

Pellevoizin said CoinShares is watching three things: changes to state permitting rules, the pace at which contracted capacity begins generating revenue, and the development of Texas grid operator ERCOT's large load connection queue. With Hinojosa's proposed approval pause awaiting legislative action, the next legislative session in Texas will likely determine whether roughly 13 gigawatts of announced projects proceed, stall, or shift toward miners that already hold energized sites.

By Marcus Bennett