The Bullish Thesis for Galaxy Digital Focuses on AI Data Centers Instead of Bitcoin Mining, According to Research

Rittenhouse Research Praises Galaxy Digital’s Shift from Bitcoin Mining to AI Data Centers

Rittenhouse Research, a new player analyzing fintech, AI, and cryptocurrency sectors, has issued a strong buy rating for Galaxy Digital (GLXY), spotlighting the company’s strategic pivot from bitcoin mining toward AI-focused data center operations.

When Galaxy’s CEO Mike Novogratz acquired Argos’ Helios data center in late 2022, the move was initially seen as rescuing a struggling bitcoin miner amid the crypto market downturn following the FTX collapse. However, the rise of AI technologies, particularly large language models like ChatGPT, unexpectedly turned Helios into a highly valuable asset in the booming AI infrastructure space.

According to Rittenhouse analysts, Galaxy’s decision to transition away from the capital-intensive and cyclical bitcoin mining business toward AI data centers positions it for more predictable, sustainable growth. Unlike mining—where revenues drop sharply every four years due to Bitcoin halving—AI data centers earn steady, high-margin income from long-term leases with cloud computing giants.

Galaxy’s Helios facility benefits from this new business model, offering consistent cash flow without the ongoing need for costly hardware upgrades. While other bitcoin miners have only recently started considering AI diversification, Galaxy was ahead of the curve.

The research firm also points to Galaxy’s robust balance sheet, including $1.8 billion in net cash and investments, and its partnership with CoreWeave, whose revenue stream is backed by long-term contracts and strong institutional support. Though some market participants express concerns about CoreWeave’s credit health, Rittenhouse views these as overstated due to the company’s structured financing arrangements.

Galaxy’s complete exit from bitcoin mining sends a clear signal to potential hyperscale tenants about its focus on AI infrastructure. This gives it an edge over competitors like Cipher Mining, which faces challenges convincing major AI clients.

If Rittenhouse’s bullish thesis holds, Galaxy Digital’s AI data center strategy could be one of the most significant success stories in crypto infrastructure this year.