Energy, Compute, Crypto - The Convergence of Three Trillion Dollar Investment Themes

- “The AI that we see today would never have reached the magnitude it’s at without Bitcoin mining”

- Bitcoin miners in the US own a really valuable asset with low cost power purchasing agreements

- “We live in a thermodynamic world”

Cryptocurrency veteran Meltem Demirors, Founder and General Partner at Crucible, let delegates into her world with her opening keynote presentation on day 2 of the CfC St. Moritz conference, emphasising that crypto is part of a larger value chain.

She explained that economic systems comprise of energy, matter and information, describing the global economy as an open system that transforms inputs, matter and resources into goods, services and products.

“Without energy and matter, we can’t do anything. Our primary objective is to get better at finding ways of creating interactions between various forms of energy. We live in a thermodynamic world,” she said.

Just about every sector including crypto, AI and technology are entirely dependent on the ability to produce energy at low cost and to deliver it to a data center, she added, drawing attention to radical shifts that are taking place.

“I think these markets are going to be built on-chain,” she said. “I’m going to say something really controversial: the AI that we see today would never have reached the magnitude it’s at without Bitcoin mining.”

This is because Bitcoin miners were early to understand the importance of low cost energy, swooping into countries, areas and sectors where power and electricity are abundant. Bitcoin miners have benefited from their ability to be load-balancers, or in other words, to adjust their activities according to the availability of cheap energy. This puts them in pole positions of power.

“They own really low cost power purchasing agreements. They are fueled by lowest cost electrification. They’ve driven persistent demand for hardware in the form of these basics, and they’ve pioneered a really cool business model for data centers,” Demirors added.

Stressing the importance of the overall interconnectedness, she noted that just about every AI data center is running the playbook that was pioneered by Bitcoin miners. She added that as institutional investors gain a foothold in the space the importance of these contracts will increase, adding that among the top 12 asset managers in the US, almost every single one is doing something in the Bitcoin space already.