Last year, Ben Gagnon set out to turn facilities that had been geared to “mine” bitcoin into data centers eager to power the artificial-intelligence boom. It seemed like a perfect way to sidestep a crash in crypto and pivot to the hottest thing on Wall Street. It turns out that life as an AI data center is just as rocky.

The CoinShares Bitcoin Mining and Digital Power ETF, which surged 72% in 2025 on the back of a furious AI rally, is down 23% so far this year. The fund holds shares of neoclouds like CoreWeave and Nebius as well as Core Scientific, CleanSpark and other bitcoin miners transitioning into data centers, making it particularly exposed to the recent AI rout.

“It’s surprising that we could leave bitcoin and find a market that is somehow more volatile than bitcoin, but we found it,” said Gagnon, chief executive of Keel Infrastructure, formerly known as Bitfarms.

Cracks in the AI trade widened last week as investors sold off shares of tech giants like Alphabet and Intel. And neocloud providers sat at the epicenter of the selloff, squeezed by heavy debt loads and rising borrowing costs. That selloff has in part been fueled by mounting skepticism from high-profile industry figures like Elon Musk, who warned that debt markets have effectively shut out any company that doesn’t have substantial revenue outside of AI data centers.

“That means the 200+ neoclouds are going to see guppy-level death and consolidation. Some will make it through, but not many,” Musk said in a recent X post.

Bitcoin miners started turning to AI as mining, the practice of using vast computer power to solve equations to unlock the digital currency, became increasingly costly. Surging competition further squeezed profit margins. And “halving” events, which cut the number of bitcoins earned by miners in half every four years, forced companies to seek other sources of revenue. The crypto crash also eroded the value of miners’ bitcoin reserves.

Coreweave, originally founded as an Ethereum mining venture before pivoting to AI, was an early success story. As the company surged in value and secured Nvidia as a backer, other miners quickly moved to follow its playbook.

Miners facing dwindling margins soon found themselves at the center of tech’s hottest trend: the AI infrastructure boom. Their humming facilities already came equipped with large energy supplies and flexible power contracts. And unlike traditional data centers bound by long-term client commitments, miners had the flexibility to reallocate that power directly to AI.

For a while, that pivot sent shares of struggling miners soaring. As tech giants Alphabet, Amazon.com, Meta Platforms, Microsoft and other “hyperscalers” committed hundreds of billions of dollars to capital expenditure on AI, these data centers suddenly became indispensable thanks to the large amounts of power capacity they control. Byg leases with these hyperscalers and major customers like Anthropic, former crypto miners tapped into a wave of new revenue.

Then, just as suddenly, investors began to question whether massive AI spending was paying off. Concerns over an AI bubble flared whenever competition intensified, growth showed signs of slowing or data-center operators reported construction logjams. More recently, elevated interest rates and geopolitical uncertainty have raised doubts about whether debt-laden developers can sustain their rapid expansion.

Coreweave, once the poster child for the pivot to AI, is now also considered an exemplar of the AI market’s wild volatility. Its shares are down 25% this year, capped by a turbulent few weeks that saw a sharp selloff across both its equity and debt.

At the same time, AI data centers are triggering familiar local and political backlash over concerns that they use too much power and water, echoing the resistance that bitcoin miners encountered during their initial expansion.

Macro forces aside, not all data centers are built alike, and each model carries distinct trade-offs. Companies that abandoned bitcoin mining in favor of data centers gain a clear advantage: a single-focus business model that is easier for Wall Street to value.

Keel Infrastructure, which completely shut down its U.S. bitcoin mining operations, has yet to sign customer contracts for its new data centers, according to Gagnon. The company expects revenue from its three data-center sites to begin next year, once commercial processes and site development are completed, he said.

Shares of Keel Infrastructure were down 6.8% year-to-date.

“People tend to put stocks in buckets,” said Kevin Dede, an analyst at JonesTrading. “I think what happens for those companies that don’t really make up their mind, or not completely through the transition, they might not be valued as highly as companies that have made the transition cleanly and have presented themselves in the investment community that way.”What fully converted data centers lack, however, is a continuous flow of newly mined bitcoin to fund their expansions. Once miners unplug their mining rigs, they give up the daily crypto revenue that once helped sustain their capital expenditures.

Publicly listed miners sold a record 48,900 bitcoin in the first half of the year, more than in any previous six-month period, according to Needham & Co. analyst John Todaro. He expects sales to rise further in the second half of the year and early 2027 as those operators tap their remaining bitcoin reserves to finance new data centers.

“We are hearing from these companies that getting financing for the AI build-out is getting harder,” Todaro said. “Because of that, we do think if you got bitcoin on your balance sheet, you’ll probably step up the selling of bitcoin to help fund capex and some of these unfunded sites.”Some miners, like CleanSpark, view bitcoin mining as a bridge toward developing its data-center projects. Through its mining facilities, the company can earn crypto revenue from a site’s power while building a data center nearby that fits customer needs. Mining continues until the power is switched over to the data center.

Shares of CleanSpark, which has more than $1 billion in bitcoin on its balance sheet, declined 19% this year.

“We don’t have any big capex plans to spend toward bitcoin mining, rather that we use bitcoin mining as a tool to secure those large loads,” said Matt Schultz, chief executive of CleanSpark “And we use the bitcoin on our balance sheet as a capital asset.”