Data-center restrictions widen the valuation gap for Bitcoin miners

By Tom Whitfield

Voters backed restrictions on data-center development in 44 of 45 completed local referendums during last week’s US midterm elections, according to the Associated Press. The measures included outright bans, temporary moratoriums and other construction limits. An NBC News exit poll found 56% of voters considered AI and data centers a crucial or major factor in their congressional vote.

In a written interview, CoinShares France managing director Benoît Pellevoizin said the political response could increase the value of existing Bitcoin-mining infrastructure, particularly sites with energized grid connections. New projects face longer approval timelines and greater regulatory uncertainty, while existing miners already hold power contracts and connections.

Pellevoizin said opposition centers on electricity prices, water consumption and Big Tech’s influence. Companies with paying AI tenants stand to benefit most, he said, because signed tenants remain critical to capturing higher valuations.

What is the infrastructure valuation gap?

CoinShares’ second-quarter Bitcoin mining report valued fully leased AI data centers at approximately $27 million per megawatt in recent transactions. By comparison, some publicly traded miners with energized but unleased capacity carried values below $3 million per megawatt. Converting mining sites for AI computing costs $8 million to $15 million per megawatt, making secured tenants and financing essential.

Grid-connection delays now exceed five years for many projects, according to the report. Facilities entering service in the PJM region took more than seven years on average, extending the period before new capacity can produce revenue.

How do signed contracts change miner valuations?

CoinShares found that miners with contracted AI or high-performance computing capacity traded at an average 12.9 times forward sales, versus 3.7 times for miners without contracts. The gap reflected investors’ preference for enforceable hosting agreements over planned conversions, Pellevoizin said. He said: “the market is increasingly focused on how quickly miners can convert their contracted capacity into revenue.”

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 generated billable revenue when the report was published.

Core Scientific had approximately 437 megawatts billing by mid-July, while rental payments at Cipher’s Black Pearl facility began in August. Those figures make the conversion of contracted megawatts into billable revenue the central operating test for miners pursuing AI workloads.

What changed after the midterm elections?

In market data reported by Unchained, Cipher Digital fell approximately 20% last Wednesday, Hut 8 declined around 23%, and TeraWulf lost less than 7% after the elections. Riot Platforms gained around 10% that day after announcing a $28 billion, 15-year AI data-center lease covering 910 megawatts at its Corsicana campus in Texas.

The moves followed CoinShares’ finding that investors increasingly distinguish miners with signed AI hosting agreements from companies relying on future development plans. That distinction places greater weight on secured grid access, tenant creditworthiness and financing terms.

Which Texas projects face the greatest risk?

Texas Governor-elect Gina Hinojosa has proposed pausing new data-center approvals until lawmakers establish additional protections for electricity consumers and local communities. Reuters cited Goldman Sachs estimates that states facing potential restrictions account for approximately 45% of planned US data-center capacity, with Texas representing about one quarter.

Jefferies analysts estimate that approximately 13 gigawatts of announced Texas data-center projects could face tighter permitting rules, although projects with secured approvals may be better positioned. Bernstein also lowered its price targets on seven Bitcoin mining companies by approximately 35% to 54%, citing financing conditions and uncertainty surrounding Texas data-center development.

What changes next in power and permitting?

In August, CoinShares renamed its WGMI fund the Bitcoin Mining and Digital Power ETF to reflect the growing overlap among Bitcoin mining, AI computing and power infrastructure. The firm is tracking changes to state permitting rules, the pace at which contracted capacity generates revenue, and ERCOT’s large-load connection queue.

The near-term test is whether Texas advances its proposed approval pauses and protections for electricity consumers and local communities. Market structure will also depend on whether contracted megawatts move from disclosed backlog into billable revenue through ERCOT’s large-load connection queue.