Shares of Bitcoin mining companies pivoting to AI infrastructure previously surged. But behind the rally, investors are now questioning whether executives and major shareholders cashed in their profits early, right before the momentum faded.
According to research firm Blocksbridge Consulting in its latest Miner Weekly newsletter, several publicly traded Bitcoin miners - including TeraWulf, Cipher Digital, Riot Platforms, and Core Scientific - recorded stock sales by executives, many through scheduled trading plans (Rule 10b5-1). While such schemes are commonly used to avoid insider trading allegations, they are now drawing increased scrutiny as AI-related stocks begin to weaken.
The TeraWulf Case: Selling First, Announcing the Deal Later
Blocksbridge highlighted TeraWulf as the most striking example, given that the company has been among the biggest beneficiaries of the AI infrastructure pivot. TeraWulf CEO Paul Prager, alongside Beowulf E&D Holdings, an entity he manages, offloaded roughly 1.59 million WULF shares before the company announced a 20-year AI infrastructure lease with Anthropic on Monday - a deal widely seen as major validation of its AI strategy.
It is not just internal executives. Stablecoin issuer and strategic investor Tether also trimmed its stake in Bitdeer after the miner’s stock rallied on the AI narrative. The TEM AI Infrastructure Growth Index, which tracks a mix of Bitcoin miners, AI cloud providers, and related energy infrastructure firms, has dropped 16% over the past month - providing context on why the timing of these sales has come under the spotlight.
Shifting Focus: From AI Narratives to Corporate Governance
According to Blocksbridge, investor focus is now shifting from the euphoria of AI growth narratives to sharper questions: will the benefits of this tech pivot actually flow to public shareholders, or be captured first by insiders? Research by Teneo across more than 350 public company CEOs even found that less than half of AI initiatives generated returns exceeding their costs - aligning with a Deloitte report describing AI as an “investment paradox where spending keeps climbing, yet returns remain uncertain.”
Rule 10b5-1 trading plans are designed to be legal and transparent, not evidence of wrongdoing. However, when the timing closely coincides with major announcements that boost share prices, the public naturally asks: who really knew what first, and who ends up shouldering the risk later?
Reported via Cointelegraph.
Disclaimer: This article is for informational and educational purposes only, not financial advice. Cryptocurrency assets are highly volatile and carry significant risk. Always do your own research (DYOR) and never invest more than you can afford to lose.
