Crypto Currents: SEC eases staking rules as bitcoin miners pivot to AI

As U.S. regulators take meaningful steps to provide clarity for the digital asset industry, key players are adapting to new economic realities. Bitcoin miners are aggressively diversifying into the booming AI sector to create new revenue streams, while a different class of public companies is turning to solana for lucrative staking yields. Stay up on the crypto news that matters with “Crypto Currents,” daily from The Fly. Join us 2 PM daily for your essential briefing on the fast-moving world of cryptocurrency on FlyCast radio. Also, subscribe to our YouTube channel for the Crypto Fly By weekly recap.

SEC CLARIFIES CERTAIN LIQUID STAKING ACTIVITIES FALL OUTSIDE SECURITIES LAWS: The U.S. SEC has clarified that certain cryptocurrency liquid staking activities do not constitute securities offerings, a significant step in providing regulatory clarity. In a staff statement, the agency said that depending on the facts, the process of staking assets and receiving a “liquid staking receipt token” does not involve the offer and sale of securities under the Acts of 1933 and 1934. SEC Chair Paul Atkins praised the move as a “significant step forward”. However, Bitwise Chief Investment Officer Matt Hougan believes the full impact of the SEC’s recent pro-crypto pivot has “not been priced in” by the market. In a post to X, Hougan stated, “I can‘t imagine reading the speech and not wanting to allocate a significant portion of your capital to crypto”.

BITCOIN MINERS DIVERSIFY INTO AI: In response to reduced block rewards from the 2024 halving and rising costs of mining operations, bitcoin miners are increasingly repurposing their energy-intensive infrastructure for the high-performance computing, or HPC, market needed for AI.

• LANDMARK DEALS: Core Scientific (CORZ), which emerged from Chapter 11 bankruptcy in early 2024, exemplifies this trend. In June 2024, the company signed a 12-year, $3.5B contract to provide AI cloud company CoreWeave (CRWV) with computing infrastructure. The move boosted investor confidence and led to renewed acquisition talks from CoreWeave.
• HYBRID MODELS: Other miners are adding AI as a secondary revenue stream. Hut8 (HUT) launched a GPU-as-a-Service subsidiary using Nvidia H100 chips (NVDA), while remaining dedicated to bitcoin mining. Hive Digital (HIVE) saw its AI and HPC hosting revenue triple to $10.1M in FY25, nearly 9% of its total revenue.
• PREPARING FOR THE FUTURE: Industry leaders Riot Platforms (RIOT) and MARA Holdings (MARA) are also strategically planning for AI integration, though they have yet to report significant revenue from AI contracts.
• THE OUTLIER: In a counter-move, mining hardware firm Canaan (CAN) closed its AI chip division in July to renew its focus on its primary business of designing ASICs for bitcoin mining.

PUBLIC COMPANIES RACE TO BUILD SOLANA TREASURIES: A growing number of public firms are purchasing solana (SOL) to capitalize on staking rewards. Bitcoin miner Bit Mining (BTCM) recently made its first purchase of 27,191 SOL for $4.5M to launch a validator node. Brand management company Upexi (UPXI) increased its holdings to over 2M SOL and said its staked tokens are earning an 8% yield, or roughly $65K a day in revenue. According to CoinGecko, the trend is growing, with the top four public holders now controlling over 3.5M SOL.

GALAXY CEO SAYS DIGITAL ASSET TREASURY RUSH HAS PEAKED: Offering a counterpoint to the rush, Galaxy Digital (GLXY) CEO Mike Novogratz said on a Q2 earnings call that the trend of crypto treasury companies has likely reached its peak. “The question now is which of the existing companies become monsters,” Novogratz stated, suggesting new entrants will “have a harder time getting oxygen”.

OTHER CRYPTO NEWS:

• A potential bitcoin (BTC) supply shock may be looming as over-the-counter desk balances fall to around 155,000 BTC, according to onchain analysis conducted by Glassnode. This comes as large buyers like Strategy (MSTR) continue to acquire significant amounts of BTC from these very desks, with the company acquiring 182,391 BTC this year alone. 
• The government of Indonesia is exploring a national bitcoin reserve strategy. Bitcoin Indonesia, an advocacy group, said it met with the VP’s office to discuss using the country’s abundant geothermal and hydroelectric resources for a state-backed mining and reserve initiative.

PRICE ACTION: As of time of writing, bitcoin (BTC) was trading at $115,001.50, while ethereum (ETH) was $3,629.17.