KBW downgrades crypto miners amid AI/HPC monetization delays, cutting ratings on Bitfarms (BITF), Bitdeer (BTDR) and HIVE Digital (HIVE) from outperform to market perform. KBW said that while the AI/HPC pivot is compelling, “the path to monetization is fraught with execution risks and long lead times.” The downgrade explicitly applies to the three named miners and reflects the firm’s view on near-term monetization timelines. KBW specifically flagged concerns about the durability of HIVE Digital’s AI cloud strategy.
Bitcoin miners are rebranding as digital infrastructure providers to capture AI demand amid a record-low margin environment after the 2024 halving. The transition toward AI and high-performance computing requires large capital expenditures and strict uptime standards, creating a divide between retrofitters and stranded assets. KBW noted that monetization of AI hosting “may take longer to pay off than the market expects.” The firm also highlighted concerns such as rising leverage at Bitfarms and related-party exposure for certain operators.
KBW described the shift of bitcoin miners into AI and high-performance computing as part of an “AI gold rush,” but cautioned that the pivot’s appeal is tempered by significant execution challenges. The firm stated that “the path to monetization is fraught with execution risks and long lead times,” characterizing monetization as uncertain in timing and difficult to execute. KBW framed the AI/HPC opportunity as compelling in concept while warning that converting that opportunity into reliable revenue streams is not straightforward. The firm emphasized the potential for extended timelines before meaningful monetization occurs.
KBW noted that transitioning to AI and HPC hosting requires large capital investment and strict uptime standards, creating operational and financial hurdles for miners pursuing the strategy. The firm said these requirements create a divide between operators able to retrofit facilities and those at risk of becoming stranded assets, with differing prospects depending on capital access and asset quality. KBW flagged that the monetization path may take longer than market expectations, underscoring concerns about execution and timing for companies pursuing AI cloud strategies. The analysis framed these risks as central to KBW’s assessment of miners shifting toward digital infrastructure roles.
KBW raised Bitfarms’ price target to $3.00 from $2.50 while outlining its expectations for the company’s AI hosting plans and near-term timing. The firm said a formal leasing agreement tied to those AI hosting initiatives is not expected to materialize until the second half of 2026. KBW flagged a potential AI cloud entry in Washington as a specific operational concern for Bitfarms and indicated rising leverage at the company as a financial risk factor. The firm’s update focused on these discrete developments rather than altering its view on broader sector dynamics. Market response to the update was muted, with Bitfarms’ shares reported as unchanged in early trading.
KBW downgraded Bitdeer (BTDR) from outperform to market perform and cut its price target to $14 from $26.50. The firm said Bitdeer is positioned to become a leading public miner by 2026 via its Sealminer technology. KBW noted that Bitdeer’s AI cloud focus adds uncertainty to the company’s outlook. Bitdeer’s stock was reported at around $13.91.
KBW identified the AI cloud focus as a source of uncertainty separate from Bitdeer’s Sealminer-based positioning to become a leading public miner by 2026. The price target reduction from $26.50 to $14 was included in the firm’s update. The stock was indicated to be trading around $13.91.
KBW cut HIVE Digital’s price target to $3.50 from $11.00 and expressed skepticism about the durability of HIVE’s AI cloud strategy. The firm noted HIVE’s reliance on partner channels and equipment financing as part of its AI cloud approach. KBW described HIVE as “sub-optimally positioned” versus pure-play data centers, indicating a competitive and structural disadvantage relative to dedicated data-center operators. The firm’s language reflected concerns about HIVE’s strategic positioning within the sector shift toward digital infrastructure.
KBW flagged HIVE’s negative pre-tax return on invested capital (ROIC) and raised concerns about scaling hashrate without sufficient operating returns in a suppressed hashprice environment. The firm emphasized the financial metric of negative pre-tax ROIC in the context of HIVE’s AI cloud strategy and financing structure. KBW’s comments identified the combination of strategic positioning, partner-dependent execution, and current operating returns as central issues for HIVE under the firm’s revised outlook.
KBW downgraded Bitfarms (BITF), Bitdeer (BTDR) and HIVE Digital (HIVE) from outperform to market perform, reflecting the firm’s cautious stance on the crypto mining sector amid attempts to pivot into AI and high-performance computing. The firm warned that “the path to monetization is fraught with execution risks and long lead times,” and highlighted that transitioning to AI/HPC hosting requires large capital investment and strict uptime standards. KBW noted that these requirements create a divide between operators able to retrofit facilities and those at risk of becoming stranded assets, and it cautioned that monetization may take longer than the market expects. Those execution and timing risks were central to KBW’s revised ratings and to its overall guarded assessment of miners repositioning as digital infrastructure providers.
