China mining crackdown, Hut 8’s $7B AI deal, CoreWeave’s delays

In bitcoin mining news this week, market volatility shook the industry as authorities in China resumed scrutiny of Bitcoin mining operations in Xinjiang, potentially shaking out gigawatts worth of bitcoin mining in the region. While hashrate faces pressure abroad, North American bitcoin miners continues to expand into AI, headlined by a massive hosting deal from Hut 8 (Nasdaq: HUT) and ongoing project developments for Core Scientific (Nasdaq: CORZ).

Meanwhile, market economics remain strained with hashprice dipping below $40/PH/day, and financing concerns have emerged for major tech players like Oracle (NYSE: ORCL). In Texas, local politics took center stage earlier this year as a vote to incorporate a town near a MARA Holdings (NASDAQ: MARA) facility failed, securing the miner’s operational status for the time being.

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Authorities in the Xinjiang region of China have ramped up scrutiny on Bitcoin miners operating in the gray market, leading to the shutdown of as much as 1.3 GW of bitcoin mining operations. This enforcement is framed as rolling inspections rather than a total seizure, though machines have been relocated to government-designated warehouses. The crackdown appears to be a response to operators becoming too brazen by advertising hosting services on social media platforms like Red Note and TikTok.

This crackdown threatens roughly 100 EH/s. While previous bans led to mass hardware migration, the current equipment in the region largely consists of older generation machines, making relocation less economically viable.

Bitcoin mining economics have deteriorated significantly, with hashprice holding squarely under $40/PH/day. The network is experiencing a significant drawdown in hashrate, attributed to both the Xinjiang crackdown and weather-related curtailment in the United States.

Hut 8 (NASDAQ: HUT) announced a hosting agreement with Fluidstack and a global hyperscaler, valued at approximately $7 billion over 15 years. The deal includes a 3% yearly escalator to account for inflation and offers potential expansion to $17.7 billion through additional capacity rights.

This agreement mirrors similar structures seen with TeraWulf (NASDAQ: WULF) and Cipher Mining (NASDAQ: CIFR), where a revenue backstop from Google, as with Hut 8’s case, opens up avenues for debt financing. The initial phase of the project is scheduled for commissioning in the second quarter of 2027.

Construction at the Denton, Texas facility owned by Core Scientific (NASDAQ: CORZ) faced setbacks over the summer due to heavy rains and winds that prevented contractors from pouring concrete, the Financial Times reported this week. These delays impact the timeline for CoreWeave’s AI infrastructure buildout, highlighting the logistical challenges of datacenter construction.

In another AI snag-up, the Wall Street Journal reported that Blue Owl Capital (NYSE: OWL) has bowed out of financing a 1 GW AI project for Oracle (NYSE: ORCL) in Michigan. Lenders cited concerns over rising capital expenditures and debt levels, signaling a potential tightening of capital markets for large-scale data center projects.

A local effort to incorporate a new town named Mitchell Bend near Granbury, Texas, failed at the ballot box earlier this year, preserving the status quo for the nearby Bitcoin mine owned by MARA Holdings (Nasdaq: MARA). Activists had sought to establish the town to create stricter noise ordinances than those provided by state law, targeting the sound emitted by the mining facility.

Despite complaints regarding noise, the measure failed by a significant margin, with approximately 60% of the small community voting against incorporation. Reporting suggests the rejection stemmed from a general cultural aversion to increased local government oversight rather than specific support for the mining operation.