Bitcoin News Today: Bitcoin Miners Diversify into AI and Exploit Tax Rules to Survive Market Swings

Bitcoin Miners Navigate Tax Advantages and Strategic Diversification Amid Market Volatility

Bitcoin miners are leveraging tax depreciation benefits and strategic diversification to mitigate financial pressures as the sector contends with fluctuating cryptocurrency prices and regulatory scrutiny. Abundant Mines CEO highlighted how depreciation of mining equipment offers substantial tax offsets, a strategy echoed by firms like Canaan Inc. and Hive Digital Technologies, which reported improved financial metrics despite Bitcoin's recent decline.

Canaan, a Nasdaq-listed miner, saw its shares surge nearly 16% following a Q3 2025 earnings report that revealed a 104% year-over-year revenue increase to $150.5 million, driven by robust mining machine sales and expanded operations. The company's gross profit of $16.6 million marked a significant turnaround from a $21.5 million loss in Q3 2024. Similarly, Hive Digital Technologies reported record Q2 revenue of $87.3 million, a 285% year-over-year jump, fueled by Bitcoin mining and high-performance computing (HPC) growth. Hive's stock rose 7.5% despite Bitcoin trading below $92,000, a seven-month low according to market data.

However, the sector faces headwinds. American Bitcoin, which operates a hybrid mining and AI infrastructure, disclosed cash burn of $43 million in Q3 2025, raising concerns about long-term viability. Meanwhile, U.S. regulators are scrutinizing Chinese mining equipment suppliers. Bitmain, the dominant producer of Bitcoin ASICs, is under investigation for potential national security risks, with U.S. authorities examining whether its hardware could be remotely manipulated for espionage or grid sabotage according to reporting. Bitmain denied the allegations, calling them "unequivocally false," but the probe has heightened tensions amid Trump-era crypto ventures tied to its products as reported.

To counter volatility, miners are pivoting toward AI and HPC. Hive's Buzz subsidiary secured a $140 million annualized revenue pipeline by deploying 504 Dell GPUs in its Bell AI Fabric data center according to reports. Cipher Mining, another major player, priced $333 million in senior secured notes to expand its Texas facilities, including a 10-year AI hosting agreement with Fluidstack as announced. These moves align with broader industry trends, as firms like Riot and Marathon Digital also diversify into HPC to offset declining Bitcoin profitability according to industry analysis.

Tax strategies remain critical. The IRS treats mining rewards as ordinary income, but depreciation of equipment and operational expenses can reduce taxable gains. For instance, Canaan's Q3 depreciation costs rose to $11.8 million, a key factor in its improved EBITDA. Meanwhile, crypto lobbying groups are pushing for tax reforms, including deferring gains on staking and mining rewards until assets are sold.

Despite these efforts, challenges persist. Bitcoin's 27% decline from its October peak has eroded miner revenues, while Bitmain's market dominance - controlling over 80% of ASIC production - leaves the industry vulnerable to geopolitical tensions. Yet, firms like Canaan and Hive are betting on scale and diversification to weather the storm. As Abundant Mines' CEO emphasized, depreciation and strategic pivots may yet prove pivotal in a sector poised for transformation.