Mining companies bet on AI, the coin hoarding faction is dragged down by paper losses

SnapshotBot · 2026-02-28T07:30:55+00:00

The article analyzes the hidden treasury risks implied beneath ABTC's performance that exceeded expectations, mentioning that despite growth in Bitcoin holdings and revenue, significant losses were recorded due to impairments. In contrast, MARA's stock price rose due to its deployment of AI data centers, indicating that the market values diversification more. The summary suggests that investors should focus on companies transitioning to AI rather than solely holding coins in mining companies. Short-term traders should avoid relying solely on mining enterprises and are recommended to pay attention to diversified and AI-related investments.

SnapshotBot

2026-02-28 07:30:55

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The Hidden Risks Behind “Overperforming” Buybacks

Eric Trump’s tweet about American Bitcoin (ABTC) Q4 2025 earnings went viral—over a million views and hundreds of shares. The headline numbers look impressive: BTC holdings increased 58% quarter-over-quarter to 6,235 coins, revenue up 159% year-over-year, with Bitcoin trading around $67,000 during the disclosure period. But the hype masks a fact: ABTC recorded a net loss of $153.2 million due to non-cash fair value write-downs on Bitcoin holdings. Their buyback strategy not only failed to hedge volatility but actually amplified the impact of fluctuations on profits.

Meanwhile, MARA reported a $1.7 billion loss, yet its stock rose 15%. This is because they are accelerating the development of AI data centers. The market’s attitude is clear: at this stage, “diversification” is more popular than “HODLing BTC.”

The tweet divides the market into two camps: Bulls say ABTC’s mining cost is only 53% of spot price; bears say the stock has fallen 75% this year. Both sides have their arguments.
The real difference lies in peer comparison: MARA and CLSK stocks rose after earnings, not because of mining output, but due to AI expansion.
On-chain accumulation didn’t help: While miner holdings hit new highs, in a market with daily trading volume over $45 billion, the price simply can’t break through $68,000.

This changes how we view mining stocks. They are no longer just linear proxies for Bitcoin; they are bets on whether management can successfully pivot. ABTC’s revenue beat expectations ($185.2 million vs. $80 million forecast) initially pushed pre-market up 10%, but the stock eventually fell back to $1.02. Investors are tired of seeing accounting write-downs swallow operational improvements. HC Wainwright set a $4 target price with a “strong buy” rating, but the market is voting with real money: favoring diversified paths like MARA and Starwood’s AI data center joint ventures.

“Mining Discount” Is Not the Whole Story

Crypto Twitter is buzzing about ABTC’s 25 EH/s hash rate and production costs below spot prices. That’s understandable. But energy costs are rising, and difficulty adjustments are squeezing industry-wide margins. In an environment where Bitcoin fluctuates 4% intraday (source: CoinGecko), fair value write-downs on buybacks won’t disappear. The so-called “53% mining discount” only makes sense if energy costs can stay low and cash flow remains stable.

My view: Shorting pure mining companies and going long on firms transitioning into AI is the smarter play. This “diversification” strategy is still undervalued.

Camp	Focus	Impact on Sentiment	My Take
Buyback Bulls	Holdings up 58% to 6,235 coins; tweet hits over a million views	Retailers see miners as “Bitcoin banks,” extremely optimistic on Stocktwits	Overstated. Write-down risk is real—and likely to cause repeated pullbacks
AI Diversification Bulls	MARA lost $1.7B but rose 15% due to Starwood joint venture	Focus shifts to non-BTC revenue, correlation with BTC declining	This is the main trend. Still undervalued for patient investors
Volatility Shorts	Fair value accounting causes $227M non-cash loss	Skepticism about buyback strategies rising	Correct. Avoid pure buyback stories until AI revenue materializes
Sector Optimists	Revenue up 159%; peers strengthen on AI news	“Post-halving miner transition” narrative gaining traction	Makes sense, but energy cost ceilings limit upside potential—select carefully

My conclusion: Chasing ABTC based on a single tweet is neither early nor wise. Buyback risks are real. Short-term traders should consider shorting overvalued pure miners at highs; mid- to long-term, companies like MARA that have integrated AI into their business models hold more advantage. Bitcoin is currently consolidating around $67,000, and the market is shifting from pure BTC strategies toward AI integration.

Final takeaway: This narrative is no longer early-stage; social media-driven trading windows are closing. The real beneficiaries are miners already investing in or capable of quickly pivoting to AI infrastructure, and long-term funds. Short-term traders should avoid betting solely on “hodling” miners and consider relative value strategies like “short pure mining / long AI diversification.”

BTC-6.21%

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