As the AI Trade Cools Off, Are Bitcoin Miners Still a Buy?

Speakers

Steve Erlic — Host

John Todaro — Needham & Company

Summary

Bitcoin Miners are decoupling from BTC price action via AI: Miners are aggressively pivoting to High-Performance Computing (HPC) and AI hosting. This is not just a narrative; firm leases are being signed (e.g., Hut 8 with Google).
Valuation Arbitrage: Pure-play miners trade at ~3-4x EBITDA. AI Data Centers trade at ~15x EBITDA. If miners execute on power delivery for AI, a massive re-rating is implied.
Hash Rate Projection: Todaro predicts ~25% of public miner hash rate will come offline over the next 12-24 months as capacity is repurposed for AI, potentially softening mining difficulty growth.
Coinbase Caution: Retail engagement in altcoins (a high-margin business) is weak. Regulatory threats to USDC yield sharing remain a binary risk for Coinbase's profitability.
Contrarian Signal: Public sentiment remains overwhelmingly negative (evidenced by Super Bowl ad reactions), suggesting a cyclical bottom for crypto assets may be forming.

Trade Ideas

Ticker	Direction	Speaker	Thesis	Time
HUT /IREN /CLSK /CIFR	LONG	John Todaro Needham & Company	Miners are signing long-term (15-year) AI hosting leases. Todaro notes HUT signed "the best contract we have seen so far" with a full credit backstop from Google. The market currently values these companies as cyclical miners (3-4x EBITDA). If they successfully transition to AI data center operators, they should re-rate toward Data Center REIT multiples (15x EBITDA). The "AI trade" offers stable, long-term revenue compared to the volatility of mining. LONG. The valuation gap between "Miner" and "Data Center" is too wide given the tangible progress (leases signed). Execution risk (building complex data centers), political pushback on power usage at the state level, and failure to secure additional power capacity.	4:37
EQIX /DLR	WATCH	John Todaro Needham & Company	Traditional Data Center REITs (Equinix, Digital Realty) trade at significantly higher multiples than Bitcoin miners. These serve as the valuation benchmark. If miners can prove they are "Data Center REITs" in disguise, they will trade up to these levels. However, miners are currently building faster/cheaper, potentially disrupting the lower end of this market. WATCH. Use these as the relative value comp to gauge the upside for miners. Miners failing to execute validates the premium on EQIX/DLR.	—
COIN	NEUTRAL	John Todaro Needham & Company	Retail demand for altcoins has "really pulled back," and Needham's estimates for Coinbase earnings are slightly below street consensus. Coinbase relies heavily on retail transaction fees (high margin) and USDC interest income. With retail quiet and the "Clarity Act" potentially threatening stablecoin yield revenue, the short-term catalysts are weak. NEUTRAL. The business is stable, but the "explosive growth" narrative is paused until retail returns or regulatory clarity on stablecoins arrives. A "bad bill" passing that restricts USDC yield sharing would significantly hit earnings.	30:49
HOOD	LONG	John Todaro Needham & Company	Robinhood had its "best month ever" in January regarding prediction market volumes. While Coinbase is trying to enter prediction markets, Robinhood is already capturing significant momentum and market share in this specific vertical. LONG. Robinhood is successfully diversifying engagement while crypto-specific retail volume lags. Commoditization of prediction markets as Gemini and Coinbase enter the space.	31:28
BTC	LONG	John Todaro Needham & Company	Reaction to the Coinbase Super Bowl ad and general public sentiment is "very negative." In crypto, peak negativity from the general public often marks a cyclical bottom (capitulation). LONG. Buy when the public hates it. Macro headwinds or continued high interest rates keeping liquidity out of risk assets.	0:35