| What to Know: – Miners issue high-yield bonds to fund AI and HPC buildouts. – Preference for contracted cash flows over volatile Bitcoin block rewards. – High single-digit coupons reflect execution risks and investor selectivity. |
Bitcoin miners are increasingly issuing high-yield bonds to fund AI and high-performance computing (HPC) data center buildouts, seeking steadier revenue from multi-year hosting and compute contracts. According to VanEck, total debt among public miners climbed from roughly US$2.1 billion to about US$12.7 billion over 12 months as companies financed new rigs and AI infrastructure. The pivot reflects a preference for contracted cash flows over the volatility of block rewards.
The cost of capital remains elevated. As reported by Cointelegraph, AI/HPC and miner-linked high-yield deals are often priced in the high single digits, even when backed by long-term AI offtake, compared with materially lower rates for investment-grade utilities. That spread underscores both execution risks and investor selectivity around counterparties, security packages, and operating readiness.
Economists warn that leverage tied to ambitious compute buildouts could interact with the credit cycle if expected returns lag. “The current pace of debt issuance by AI-related companies constitutes a mounting potential threat to the financial system,” said Mark Zandi, Chief Economist at Moody’s Analytics.
Upgrading mining sites for AI/HPC involves capital-intensive changes to power redundancy, thermal management, and uptime service levels. As reported by Wired, many mining facilities do not meet “five nines” availability without additional backup generation and distribution investments. Those engineering constraints often translate into tighter covenants and higher risk premia in bond documentation.
Issuance has scaled quickly alongside investor demand. According to TronWeekly, AI and Bitcoin-linked data centers have tapped about US$33 billion of high-yield bonds as borrowing costs rose, a sign of robust expansion tempered by higher required returns. The figures indicate rising dependence on capital markets to lock in multi-year build programs.
Select transactions highlight how counterparty quality and contract visibility shape pricing. The Financial Times reported that CoreWeave raised US$2 billion of unsecured junk bonds at 9.25% interest, with orders reportedly exceeding US$7 billion, to refinance liabilities and extend AI data center capacity. The oversubscription suggests appetite for credits with credible AI demand and scale.
Contracts with hyperscalers can compress coupons when they reduce cash-flow uncertainty. Gate.com detailed an affiliate of Cipher Mining, Black Pearl Compute, issuing about US$2 billion in bonds at 6.125% to build a 300 MW site under a 15-year lease with AWS, with books reportedly near US$13 billion. Investor response indicates preference for long-tenor, investment-grade tenant exposure.
Selectivity persists for issuers earlier in the ramp. Blockchain.News noted that Applied Digital had to offer around 10% on a junk-bond deal, a signal that investors are demanding higher compensation where tenant mix, collateral, or execution pathways are perceived as riskier. Such dispersion points to underwriting focused on contract enforceability, uptime SLAs, and build-delivery milestones.
Equity research frames the strategic pivot as potentially earnings-accretive for miners that already control power and land. Piper Sandler has described AI/HPC hosting economics as more attractive than core mining for operators with permits and infrastructure in place, although performance will depend on timely construction, power procurement, and contract execution.
Across the market, structures span secured and unsecured notes with covenants tied to construction progress, interconnection timelines, and operating availability. Long-term offtake and creditworthy counterparties can improve bankability and lower coupons, but power-market volatility and technical upgrades may keep borrowing costs elevated until facilities demonstrate stable runtime at scale.
Disclaimer:
Marketbit.io provides cryptocurrency news, alerts, commentary, and entertainment content for informational purposes only. Nothing published on this site constitutes financial, investment, legal, or trading advice. Cryptocurrency markets are highly volatile and involve substantial risk, including the potential loss of capital. Always conduct your own research (DYOR) and consult with a qualified financial professional before making any investment decisions.
