Neocloud Sell-Off Leaves Bitcoin Miners Oversold

Important Disclosures

Statements regarding market cycles are the author’s opinion as of this date and are not a prediction of future performance. Past performance is no guarantee of future results.

Definitions

Bitcoin (BTC) is the world’s largest cryptocurrency by market capitalization.

Powered shell providers (PSPs) are companies, many of them bitcoin miners that have pivoted to AI, that lease energized, grid-connected data center sites to tenants, who install their own computing equipment.

Neoclouds are cloud providers that rent GPU computing capacity to AI developers and companies; CoreWeave is an example.

Adjusted funds from operations (AFFO) is a cash-flow measure used for real estate investment trusts. In this piece, the AFFO equivalent for a powered shell provider is site net operating income less interest on debt, excluding principal amortization.

Basis Point (bps) is one one-hundredth of one percent (0.01%); 100 basis points equal 1%.

Hyperscalers are the largest cloud computing companies, such as Amazon Web Services, Microsoft Azure and Google Cloud, that operate massive global data center networks and are among the biggest buyers of AI chips and data center capacity.

Graphics processing unit (GPU) is a specialized chip originally designed for rendering graphics that is now the primary hardware used to train and run AI models. NVIDIA's H100, B200 and Vera Rubin are examples.