Why institutions are shifting from Bitcoin holdings to mining infrastructure

Investing.com -- Institutional investors are moving beyond buying and holding Bitcoin to financing and owning the infrastructure that powers it, turning mining operations into a new and potentially yield-generating asset class.

Bitcoin mining, once dominated by individual enthusiasts, has evolved into a capital-intensive industry that attracts hedge funds, private equity firms and energy companies seeking exposure to the cryptocurrency sector without the volatility of direct holdings.

Mark Zalan, chief executive of GoMining, said in a recent conversation with Investing.com that institutional capital is increasingly interested in the productive side of the Bitcoin ecosystem.

GoMining operates mining facilities and offers users access to hash power, the computing capacity used to validate Bitcoin transactions. 

The company began as a commercial miner in 2017 and launched its consumer platform in 2021. It now reports more than 4.5 million registered users and over 10 million terahash of active mining capacity.

Zalan said GoMining’s focus is to make mining accessible to both retail and institutional participants. 

Users can start mining with as little as $25, while larger investors are participating through structured investment vehicles and mining-backed funds.

According to Zalan, the economics of mining can outperform simply holding Bitcoin. Miners continue earning Bitcoin daily even during periods of price stagnation, providing a steady yield and partial hedge against market volatility. 

This steady return profile is drawing attention from institutions looking for new income-generating assets uncorrelated with traditional markets.

He said the next phase of growth in the sector is being driven by tokenized hash rate, a process that converts mining power into digital tokens representing fractional ownership of computing capacity. Holders of these tokens receive a corresponding share of the Bitcoin produced by that capacity.

Zalan described tokenized hash rate as a key step in the financialization of mining, allowing investors to trade exposure to Bitcoin production much like commodities or exchange-traded funds. 

The model also creates opportunities for the development of derivatives such as futures and options linked to hash power or network difficulty.

Institutional investors are also being drawn by the potential for higher returns compared with holding Bitcoin directly. 

Mining infrastructure, Zalan said, offers operational leverage and exposure to Bitcoin’s long-term appreciation while generating consistent income. 

He compared it to investing in data centers or other digital infrastructure that underpins the broader economy.

Environmental and energy considerations are another area of institutional focus. Bitcoin mining’s high electricity use has been widely criticized, but operators are increasingly seeking to position themselves as flexible energy consumers that can stabilize power grids. 

Zalan said mining operations can reduce or shut down their electricity use during peak demand and absorb excess renewable power during off-peak hours, helping utilities manage fluctuating energy supply.

He said this flexibility gives miners a role in supporting renewable integration and energy sustainability, making them potential partners for energy producers rather than competitors for resources.

GoMining is expanding its ecosystem with new financial products designed to integrate mining more directly with consumer finance. 

Planned initiatives include payment cards and yield-bearing accounts tied to mined Bitcoin, as well as collateralized lending products backed by Bitcoin or hash power. 

Zalan said these offerings will allow users to earn, spend and borrow against their mining proceeds within a regulated framework.

The company also expects growing institutional participation through dedicated funds that invest in mining operations and infrastructure. 

Zalan said GoMining is developing an institutional fund to give large investors, including pension and sovereign funds, access to the mining sector in a compliant and structured format.

He said Bitcoin has already become part of mainstream investment portfolios, and the next phase of development will focus on making its infrastructure investable. As Bitcoin exchange-traded funds broaden exposure to the cryptocurrency, infrastructure-backed products could provide a complementary route for investors seeking stable, yield-oriented exposure to the sector.

As financial markets mature around digital assets, the focus appears to be shifting from the coins themselves to the systems that generate and secure them. 

For institutional investors seeking diversification and yield, Bitcoin’s underlying infrastructure may represent the next major investment frontier.