Mining Debt Set for New Records — But This Time It’s Different
From ASIC-backed loans to AI-backed convertibles, Bitcoin miners are once again tapping billions in debt — reshaping the industry’s capital structure.
After a short period of cooldown, Bitcoin miners are back in the debt markets — this time in force.
The combined debt and convertible-note offerings from 15 public miners hit a record $4.6 billion in Q4 2024, briefly reduced to under $200 million in early 2025, and has since roared back to $1.5 billion in Q2.
Although their Q3 numbers are still pending, Cipher, MARA, and TeraWulf alone raised around $3 billion through convertible bonds last quarter. Additional credit lines from Bitfarms, CleanSpark, and Soluna add to the total. The combined debt financing may set a new record in Q3.
Now, heading into Q4, the sector’s debt appetite is accelerating again. TeraWulf is planning a $3.2 billion private placement of senior secured notes — the largest single offering ever by a public miner. The same week, IREN closed the offering of $1 billion convertible bonds, and Bitfarms is proposing $300 million in convertible notes.
Taken together, the sector has already matched the total financing raised during the last bull cycle — but the structure and intent this time look fundamentally different.
From ASICs to AI: A Different Kind of Leverage
In the 2021 cycle, only MARA and Core Scientific were notable ones issuing convertible bonds—and Core’s paper carried ~10% interest, a heavy burden that preceded its Chapter 11 filing in 2022. Most other miners—Argo, Greenidge, IREN, Bitfarms, Stronghold, and Core itself, etc. —leaned on loans secured by bitcoin, hardware or data center infrastructure. When hashprice collapsed, lenders seized machines and sites, triggering a cascade of distress.
This time, the center of gravity has shifted:
More convertibles, fewer ASIC liens. Issuers are opting for equity-linked paper (mostly zero-coupon), reducing forced-liquidation risk tied to machine collateral.
Proceeds for AI/HPC buildouts. Capital is earmarked for GPU hosting, AI clouds, and power-dense data centers, not just ASIC purchases.
Broader buyer base. The pitch resonates with infra- and credit investors seeking exposure to energy-backed compute, not only BTC beta.
Leverage Meets the Zetahash Era
The renewed borrowing coincides with the network’s first 1.03 ZH/s month and a hashprice dip sub-$47/PH/s. With margins tight, growth requires capital—but the collateral thesis has evolved from boxes of miners to long-term power, land, and modular data-center capacity that can monetize across BTC + AI cycles.
Convertibles shift risk from collateral marks to equity dilution and execution: miners must stand up revenue-producing AI/HPC at scale while maintaining BTC optionality. If they deliver, the capital stack is more resilient than 2021’s ASIC-lien model. If not, dilution replaces repossession—but equity holders still bear the brunt.
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Really insightful analysis on how the debt structure has evolved since 2021. The key difernce you highlighted - shifting from ASIC liens to convertibles - fundamentally changes the failure mode for these companies. In the last cycle, when hashprice collapsed and lenders seized hardware, it created forced liquidations at the worst possible time. Now with convertibles, equity holders absorb the pain through dilution rather than asset seizures, which should reduce binary blow-up risk. What's particularly interesting about the Cipher/MARA/TeraWulf $3B raise is that these convertibles are mostly zero-coupon, meaning no cash interest burden even if BTC and hashprice stay depressed. The bet is essentially that AI/HPC revenue can cover the capex before conversion dates hit. The risk has shifted from "can we service debt during a bear market" to "can we actually execute these AI buildouts at scale." Your point about broader buyer base is crucial too - infra and credit investors buying these converts are underwriting power/land/datacenter assets with dual-use optionality (BTC + AI), not just pure BTC beta. This makes the capital structure more resilient in theory, but the execution risk is enormous. If these miners can't stand up revenue-producing HPC at scale, equity dilution could be brutal even without forced liquidations.
Regarding the topic, your latest piece, following on the 2021 cycle, offers an excelent perspective.