Bitcoin rose nearly 4% over the past 24 hours on Nov. 4, but shares of Bitcoin miners pursuing AI data center expansion moved the other way. Hut 8 closed down 23.23%, Cipher Digital fell 19.95%, and IREN lost 11.24%.
The market's concern centered on Texas. A day earlier, the state elected a governor who supports pausing approvals for new data centers, and the main AI campus projects for all three companies are in Texas.
Weakness extended across other mining and AI compute names. Galaxy Digital fell 16.99%, CleanSpark dropped 16.56%, Core Scientific lost 10.39%, and CoreWeave declined 9.90%. The Philadelphia Semiconductor Index was down 3.13% on the same day.
Texas policy risk moved to the front of the trade
Governor-elect Gina Hinojosa, a Democrat, has argued that approvals for new data centers should be paused until the state legislature puts rules in place to protect residents. She is set to take office in January.
Why Hut 8 fell the most
Hut 8 released its third-quarter results before the market opened on Nov. 4. Revenue came in at $71.1 million, compared with $83.5 million in the same period last year, a decline of about 15%. Revenue fell across all three business segments.
Net income was $189.5 million. Still, the filing showed that most of that figure came from a $413.8 million increase in the value of digital assets, mainly Bitcoin. In other words, the gain was largely tied to appreciation in holdings rather than realized sales.
Hut 8's largest campus, Beacon Point, is in Texas and has 1,000 MW under construction. In the same earnings release, the company also announced the acquisition of two energized sites in West Texas for a total price of up to $180 million, though the deal still requires final power approval.
On the earnings call, CEO Asher Genoot raised the Texas election before the Q&A session began. He said the company respects the election result and agrees with the incoming governor's view that the legislature should establish rules first. He added, 「we do not believe the election result changes the outlook for Beacon Point」.
Genoot said he expects Beacon Point Phase 1 to receive an unconditional classification on Dec. 17. Analysts kept pressing on Texas, asking whether the election could disrupt the financing timeline for Phase 2 and whether tenants might shift outside the state. Genoot said he believes the state's approach is not 「do not invest in Texas anymore」 but rather 「how do we build responsibly」.
Three dates the market is watching next
The first is the Texas grid interconnection review for data centers. Results are expected on Dec. 10, with a final determination on Dec. 17, still during Abbott's term. Hut 8's Beacon Point Phase 1 and Cipher's Colchis are both waiting for those December review results.
If the projects receive unconditional classification on Dec. 17 as expected, one layer of approval uncertainty would be removed. Hut 8 CFO Sean Glennan said that would clear most of the remaining obstacles and allow the company to begin financing for Beacon Point Phase 2. If the review is delayed, or if the classification remains conditional, energization and financing timelines would need to be reassessed.
The second date is IREN's earnings release and conference call, scheduled for 5 p.m. Eastern Time on Nov. 5 for the first quarter of fiscal 2027. The article noted that this corresponds to 6 a.m. Taiwan time on Nov. 6. Because many of IREN's campuses are in Texas, investors will be watching whether management is asked about approval progress.
The third is Hinojosa's inauguration in January. She has said new data center approvals should be paused until the legislature sets rules. How that position will be implemented in practice, and whether review outcomes reached during Abbott's term will carry forward, may not become clear until after she takes office.
