When Mike Novogratz, CEO of Galaxy Digital (GLXY), bought Argos’ Helios Data Center in late 2022 at the depths of Crypto winter after FTX, the company thought it was rescued a desperate Bitcoin (BTC) miner on the brink of bankruptcy.
However, this was before ChatGpt became mainstream. Novograts and co. Thanks to the explosive growth of large-scale language models (LLM), this data center didn’t think it would become a strategic asset as the growing artificial intelligence (AI) industry is seeking more data center space.
As an analyst at Rittenhouse’s research outlined in a new memo, Galaxy’s Lacky Find incited completely incited the company’s move from BTC mining, but it could now be the most advantageous pivot of cryptography.
Rittenhouse’s research is a long galaxy digital $glxy $brphf
Galaxy’s flagship data center Helios believes it will generate $1.7 billion in EBITDA and $32 billion in stock value in the short term.
Our complete paper can be found in PDF at https://t.co/mz3jww1cyd pic.twitter.com/4jnhn10oyv.
– Rittenhouse Research (@rhouseresearch) May 15, 2025
Rittenhouse analysts argue that AI data centers represent a much better business model than BTC mining. This is because it generates stable long-term cash flow with minimal continuous capital expenditure, in contrast to the volatility and capital strength of Bitcoin mining.
BTC mining revenues will decrease by approximately 50% every four years due to scheduled halving. In effect, miners’ play is the price of BTC and the ability of semiconductor fabs and designers to develop more efficient chips, which is a number of variables for investors.
In contrast, AI data centers like Galaxy’s Helios facilities earn consistent margin revenue through long-term triple net leases to long-term triple net leases (large cloud computing providers) without the need for ongoing investment in mining equipment.
“The Galaxy stumbled upon Helios thanks to good fortune,” Rittenhouse wrote in their notes. Competitors such as riot platforms and crypto mining are trying to make “rewrite history” public, retrospectively suggesting that their business is always wider than BTC mining, but analysts say, “In fact, these miners weren’t planning on doing anything other than mining BTC until ChatGPT was launched.”
A wider industry change?
The Galaxy migration reflects a broader trend as BTC miners try to pivot towards AI and cloud computing.
However, analysts highlight the great benefits of Galaxy due to its excellent balance sheet ($1.8 billion in net cash and investment), successful execution records, and reliability established through CoreWeave leases.
While some have raised concerns about CoreWeave’s creditworthiness and have caused Galaxy’s stock to trade at a massive discount, Rittenhouse analysts say these fears are heavily exaggerated and highlight CoreWeave’s extraordinary revenue stability.
Analysts emphasize that CoreWeave’s obligations are carefully constructed through lottery facility loans that are specifically used to fund infrastructure directly linked to secure customer contracts and are specifically utilised to dramatically reduce the risk of default.
Rittenhouse also notes that the Galaxy has completely invaded the AI and is not currently exposed to mining.
“Galaxy will completely terminate all Bitcoin mining activities, focusing solely on AI data center ambitions and send positive signals to potential hyperscalar tenants,” the analyst wrote.
As Rittenhouse writes, Cipher Mining CEO Tyler Page recently admitted that Miners are facing when they approach key AI customers.
“When you’re talking to counterparties with a market capitalization of $1 trillion, the downside of Bitcoin Miners is that the major counterparties say, “Wow, it’s a great duty for us to backstop for such a critical investment.”
The Galaxy doesn’t have that problem. With this Helios contract in place and the Novogratz company is completely out of mining, the Galaxy accidental pivot may turn out to be Crypto’s best strategic move over the years if Rittenhouse’s paper is correct.
