BTC mining industry finances AI gold rush with $11B convertible bond boom

Bitcoin (BTC) miners have raised $11 billion in convertible debt — corporate debt that is convertible to stocks — over the last year, amid a pivot into artificial intelligence data centers.

Miners completed 18 convertible bond deals following the April 2024 Bitcoin halving that slashed the block reward by 50%, according to TheMinerMag.

The average convertible bond issue more than doubled, with mining companies MARA, Cipher Mining, IREN and TeraWulf each raising $1 billion through single bond issues. Some offerings have featured coupons as low as 0%, signaling investors’ willingness to waive interest payments in exchange for potential equity upside.

Convertible bond deals from July 2024 to October 2025. Source: TheMinerMag

In contrast, most convertible bonds issued by Bitcoin miners the preceding year ranged from $200 million to $400 million.

The mining industry diversified into AI data centers to address revenue shortfalls following the April 2024 halving. Miners continue to struggle with a challenging business model, which is affected by tokenomics, trade policies, supply chain issues, and rising energy costs.

Related: Bitcoin miners build on gains after Jane Street discloses stakes

Miners brace for hashrate war and energy-hungry AI operations

Miner debt has surged by 500% over the last year, totaling $12.7 billion, according to a recent report from investment manager VanEck.

However, VanEck analysts Nathan Frankovitz and Matthew Sigel noted that these debt levels reflect a fundamental problem in the mining industry — heavy capital expenditures on mining hardware that must be upgraded annually in some cases.

“Historically, miners relied on equity markets, not debt, to fund these steep capex costs,” they wrote, and called the significant hardware costs to remain competitive a “melting ice cube.”

Bitcoin’s network hashrate continues to rise.

The rising Bitcoin mining hashrate, the total amount of computing power securing the Bitcoin network, also continues to rise, forcing miners to expend ever-greater computing and energy resources as time goes on.

In October, US Energy Secretary Chris Wright proposed a regulatory change to the Federal Energy Regulatory Commission (FERC) that would allow data centers and miners to connect directly to energy grids.

This would allow these energy-intensive applications to satisfy their energy needs while they act as controllable load resources for the energy grid, balancing and stabilizing the electrical infrastructure during times of peak demand and curtailing excess energy during low demand.

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