Bitcoin mining stocks are sinking along with BTC

This is a good time to be a bitcoin (BTC) miner that has pivoted to AI infrastructure and high-powered computing (HPC) services in order to lessen your exposure to the suddenly tanking crypto market.

However, this is not the best time to be a bitcoin miner that is still getting a significant amount of its business from mining BTC.

Although Wall Street has grown bullish on miners who have made the pivot to AI, investors have currently fallen out of love with any stocks that are connected to crypto.

And this exposure to the crypto market appears to be hurting miners even if they've actually expanded a part of their businesses into AI.

Take the case of Bitcoin miner Hut 8 Corp. (HUT) . While it has expanded beyond the crypto sector and is building out its HPC and AI infrastructure business, the company has taken a different approach than some of its peers by doubling down on its bitcoin mining at the same time.

In March, Hut 8 launched American Bitcoin Corp., a new mining venture majority-owned by Hut 8 and created with Eric Trump. Formerly known as American Data Centers, the company was initially founded by Eric and Donald Trump Jr.

Hut 8 announced a deal in May to take American Bitcoin public via a merger with Gryphon Digital Mining (GRYP).

“Hut 8 envisions a middle ground between traditional Bitcoin mining and AI data centers,” the company wrote earlier this year.

But American Bitcoin has sunk 23.5% over the past month, erasing about $300 million of Eric Trump's holdings in the process.

The company's stock slid as much as 7.7% on Monday. Although it has surged 112.6% for the year, it has now dropped 14% over the past month as the bitcoin downturn has worsened.

Riot Platforms (RIOT) has also taken a hit on crypto's plunge, dropping 6.8% in early morning trading on Monday.

The company has aggressively expanded into the HPC sector, naming Jonathan Gibbs as Chief Data Center Officer in June to lead the new HPC division. Gibbs will oversee construction of state-of-the-art facilities aimed at hyperscale and enterprise tenants.

The company earlier this year acquired an additional 355 acres adjacent to its Corsicana, Texas data center facility, setting the stage for even more capacity. In fact, Needham analysts called Riot's Corsicana site “one of the most attractive HPC sites in our universe” in a June client note.

But like Hut 8, the company has pivoted to HPC while also doubling down on its bitcoin mining services. The company said last month that it had mined 437 bitcoin in October, although that was 2% fewer than September and down 14% year over year.

Riot's stock has dropped 21.7% over the past month.

Bitfarms (BITF) announced last month that it plans to wind down its bitcoin mining operations and focus on HPC/AI workloads beginning in 2027. Investors are bullish on this plan, sending its stock up nearly 113% for the year.

But like most other crypto-related stocks, the near-term performance has reflected the ongoing slump. Shares of Bitfarms are down 17.4% over the past month.

And with BTC falling from $91K on Friday to $84K at one point on Monday, sentiment is only expected to get worse.