Why Did Keel Shut Down Its U.S. Bitcoin Mines? Keel Infrastructure Corp., formerly known as Bitfarms, has decommissioned all of its U.S. bitcoin mining operations as the company redirects pow
Why Did Keel Shut Down Its U.S. Bitcoin Mines?
Keel Infrastructure Corp., formerly known as Bitfarms, has decommissioned all of its U.S. bitcoin mining operations as the company redirects power and infrastructure toward artificial intelligence and high-performance computing data centers. The shutdown represents one of the clearest breaks yet between Keel’s bitcoin mining history and its new strategy. The company is preparing its U.S. sites for data center tenants that require large amounts of electricity, land and access to power infrastructure.
Keel became the parent company of Bitfarms Ltd. in April, leading to the rebranding as the business reduced its dependence on cryptocurrency mining. The company is following a path taken by several miners seeking to convert power-heavy facilities into infrastructure for AI and high-performance computing workloads. The economics behind that decision are increasingly centered on electricity. Bitcoin mining revenue depends on cryptocurrency prices, network difficulty and mining efficiency, while AI data centers can potentially generate longer-term contracted revenue from customers competing for limited power capacity. “Power is the constraint,” CEO Ben Gagnon said. “Everything else is downstream of it. Eighteen months ago, we positioned the Company around this thesis, and today all three of our priority sites are nearing full permitting with multiple prospective tenants negotiating for each one.”
Why Is Keel Selling Its Bitcoin Holdings?
The infrastructure transition is being accompanied by a reduction in Keel’s bitcoin exposure. The company sold 1,085 BTC for $75 million between April 1 and Aug. 7 as it continued to wind down its bitcoin holdings. Keel retained 1,861 BTC on its balance sheet after those sales. Reducing the position gives the company additional cash while lowering its direct exposure to bitcoin price movements at a time when management is allocating capital toward data center development. The sales also separate Keel from miners that continue to treat bitcoin holdings as an important part of their treasury strategies. For Keel, the balance sheet is becoming more closely tied to the capital requirements of infrastructure development rather than accumulating cryptocurrency produced through mining. That transition carries its own costs. Converting mining locations into AI and high-performance computing facilities can require upgrades to electrical systems, cooling, networking and buildings. Permitting and tenant negotiations can also take time before a site begins generating meaningful revenue.
Investor Takeaway
Keel is replacing exposure to bitcoin mining economics with a bet on scarce data center power. The investment case is therefore becoming less dependent on BTC prices and more dependent on tenant contracts, development costs and how quickly its sites can begin producing AI infrastructure revenue.
What Do Keel’s Earnings Say About The Transition?
The financial impact of the mining retreat is already visible. Keel reported $30 million for the quarter, down 50% from a year earlier, citing lower bitcoin prices and the shutdown of its Moses Lake cryptocurrency mining operations among the factors affecting results. The company also moved from nearly $11 million in income during the second quarter of 2025 to a $141 million loss. Keel shares dropped more than 11% on Monday following the earnings release. The sharp loss shows why the timing of the AI conversion matters.
Mining revenue is falling before the replacement data center business has fully matured, creating a period in which development spending can rise while revenue from the legacy operation contracts. Keel nevertheless reported $819 million of liquidity, giving management financial resources to fund the transition and negotiate with potential customers. Gagnon said the company also has uncommitted 2027 capacity across PJM and Washington. “With $819 million of liquidity and uncommitted 2027 capacity across PJM and Washington, we are negotiating from a position of strength,” he said.
Can AI Infrastructure Replace Bitcoin Mining Revenue?
The central question is whether Keel can turn its access to electricity into higher-value, more predictable data center contracts. AI infrastructure demand has made power availability one of the most important assets for companies that already control suitable sites and grid connections. Bitcoin miners are natural candidates for conversion because they already operate electricity-intensive facilities, but the businesses are not interchangeable. AI customers typically demand more advanced infrastructure, stronger uptime guarantees and different cooling and networking systems than cryptocurrency mining operations. Keel’s three priority sites nearing full permitting and attracting multiple prospective tenants is therefore more important to the new strategy than bitcoin production figures. Signed contracts, development schedules and expected returns from those sites will provide the clearest evidence of whether the conversion can replace lost mining revenue. The company’s remaining 1,861 BTC also gives it another source of liquidity if additional capital is required. Investors will have to weigh that financial flexibility against the risk that further bitcoin sales reduce Keel’s ability to benefit from future BTC rallies. Keel is no longer simply a miner trying to diversify. With its U.S. mining operations decommissioned, the company is becoming an infrastructure developer whose future valuation will increasingly depend on power capacity, tenant demand and execution in the AI data center market. ee proposed single-token products from its U.S. ETF pipeline. In separate requests filed with the U.S. Securities and Exchange Commission late Friday, Grayscale said it “does not intend to proceed with the planned distribution” of shares in each proposed trust. The withdrawals were initiated by Grayscale rather than rejected by the SEC, an important distinction for investors assessing whether the decision resulted from regulatory resistance or the asset manager’s own product strategy. Grayscale first pursued a Cardano ETF in February 2025 and submitted a Polkadot proposal later that month. Registration statements for the ADA and DOT products followed on Aug. 29, while the HBAR registration was filed on Sept. 9. Each vehicle was designed to provide passive exposure to its underlying cryptocurrency, tracking the token’s value after fees and expenses. Grayscale said no securities had been sold and no preliminary prospectuses had been distributed under the registrations.
Did Falling Token Prices Make The ETFs Less Attractive?
The withdrawals come after sharp declines across all three cryptocurrencies. ADA is down more than 41% year to date, while DOT has fallen 54% and HBAR has lost about 35%. The drawdowns are even larger when measured from around the time Grayscale began pursuing the products. Since late February 2025, ADA has fallen roughly 70%, DOT has declined about 80% and HBAR has dropped more than 70%. Those losses do not prove that weak prices caused Grayscale to abandon the funds, but they change the commercial case for launching them. ETF issuers need enough demand and assets under management to cover listing, custody, administration and marketing costs. A prolonged decline can reduce investor interest and make it harder for a new product to build the scale needed to remain economically attractive. Single-token altcoin ETFs also depend on more concentrated demand than broad crypto products. Bitcoin and Ethereum already have large institutional investor bases and deeper spot markets, while smaller tokens may need strong price momentum or clear demand from advisers and retail investors to support a dedicated fund.
Investor Takeaway
Grayscale’s decision shows that regulatory eligibility alone does not guarantee an ETF launch. Asset managers also need enough investor demand, trading liquidity and expected assets under management to justify keeping a single-token product alive.
What Does The Withdrawal Mean For Altcoin ETFs?
The three cancellations reduce Grayscale’s pipeline at a time when crypto ETF issuers are testing how far investor demand extends beyond Bitcoin and Ethereum. The firm currently lists 17 ETF products on its website, including a Bitcoin Mini Trust ETF, an Ethereum Staking Mini ETF and a Hyperliquid Staking ETF. That product mix shows Grayscale is still willing to offer exposure to newer digital assets, but the ADA, DOT and HBAR withdrawals suggest it may be becoming more selective about which single-token funds receive capital and distribution support. The distinction matters because the next stage of crypto ETF competition may be less about obtaining permission to launch and more about identifying which assets can attract enough trading activity to sustain a fund. As more issuers enter the market, low-volume products face a harder path. Investors generally prefer funds with tighter bid-ask spreads, larger asset bases and deeper secondary-market liquidity. Those characteristics tend to reinforce each other, making it difficult for smaller products to catch up once assets begin clustering around a few leading funds.
Could Grayscale Return To ADA, DOT And HBAR Later?
Withdrawing the registrations does not prevent Grayscale from returning with new filings in the future. If market conditions improve, token prices recover or investor demand increases, the firm could reconsider whether dedicated ADA, DOT or HBAR products make commercial sense. For now, however, the withdrawals show that not every crypto asset with an identifiable investor following will automatically progress from ETF proposal to listed product. That may become increasingly important as issuers expand beyond the largest cryptocurrencies. The strongest candidates are likely to be tokens that combine sufficient market capitalization, liquidity, institutional interest and product demand rather than assets chosen only because they are technically available for an exchange-traded structure. For ADA, DOT and HBAR holders, the immediate impact is the loss of a potential U.S. investment channel that could have made the tokens easier to access through traditional brokerage accounts. The longer-term question is whether another issuer will pursue similar funds or whether weak performance and limited demand keep these assets outside the next wave of successful crypto ETFs.
