IREN Ltd., once known for mining Bitcoin, is undergoing a dramatic reinvention as an AI infrastructure provider—a transformation that will face a critical test when the company reports second-quarter earnings on Thursday.

Formerly Iris Energy, IREN has shifted away from crypto mining and into what it calls a “Neocloud” model, repurposing its stranded-energy Bitcoin sites into large-scale data centers designed to support artificial intelligence workloads.

A $9.7 billion partnership with Microsoft helped position IREN as a potential player in the race to supply next-generation compute capacity.

The ambition has not come cheap

Ahead of earnings, IREN shares have tumbled, falling nearly 19% intraday on Wednesday and down about 28% over the past five days, as investors worry that funding the company’s GPU-heavy cloud expansion could require dilutive equity issuance.

After a 314% rally over the past year, the pullback underscores growing skepticism about whether IREN can scale its AI cloud business without eroding shareholder value.

The upcoming earnings report represents a clear break from the company’s Bitcoin mining past, shifting attention to cloud execution, financing discipline, and competition with established players like Amazon and Oracle—making it a critical test of the company’s pivot.

IREN isn’t alone

Other companies have attempted comparable transformations—some successfully, others less so:

• Core Scientific – Transitioned from pure Bitcoin mining to offering high-performance computing and AI colocation services after emerging from bankruptcy, leveraging existing infrastructure to attract AI customers.
• Hut 8 – Expanded beyond crypto mining into HPC and data center services, pitching its energy assets as ideal for AI workloads.
• Northern Data – Repositioned itself as a European AI and cloud infrastructure provider, shifting investor focus from Bitcoin exposure to GPU-based compute capacity.
• Nvidia (earlier era) – While not a crypto miner, Nvidia successfully pivoted from gaming-focused GPUs to becoming the backbone of AI compute, showing how infrastructure players can redefine their identity through demand shifts.
• IBM – Moved from legacy hardware to cloud and AI services over the past decade, using partnerships and hybrid infrastructure to reinvent its growth narrative.

IREN now joins this list at a moment when AI infrastructure demand is booming—but capital markets patience is thinning. Whether it becomes a case study in smart reinvention or costly overreach may hinge on what it delivers this earnings season.

Key takeaways:

• Heavy outflows from Bitcoin exchange-traded funds and massive liquidations show that the market is purging highly leveraged buyers.

• Bitcoin options metrics reveal that pro traders are hedging for further price drops amid a tech stock sell-off.

Bitcoin (BTC) slid below $73,000 on Wednesday after briefly retesting the $79,500 level on Tuesday. This downturn mirrored a decline in the tech-heavy Nasdaq Index, driven by a weak sales outlook from chipmaker AMD (AMD US) and disappointing United States employment data. 

Traders now fear further Bitcoin price pressure as spot exchange-traded funds (ETFs) recorded over $2.9 billion in outflows across twelve trading days.

The average $243 million daily net outflow from the US-listed Bitcoin ETFs since Jan. 16 nearly coincides with Bitcoin’s rejection at $98,000 on Jan. 14. The subsequent 26% correction over three weeks triggered $3.25 billion in liquidations for leveraged long BTC futures. Unless buyers deposited additional margin, any leverage exceeding 4x has already been wiped out.

Some market participants blamed the recent crash on the lingering aftermath of the $19 billion liquidation on Oct. 10, 2025. That incident was reportedly triggered by a performance glitch in database queries at Binance exchange, resulting in delayed transfers and incorrect data feeds. The exchange admitted fault and disbursed over $283 million in compensation to affected users.

According to Haseeb Qureshi, managing partner at Dragonfly, huge liquidations at Binance “could not get filled, but liquidation engines keep firing regardless. This caused market makers to get wiped out, and they were unable to pick up the pieces.” Qureshi added that the October 2025 crash did not permanently “break the market,” but noted that market makers “will need time to recover.”

The analysis suggests that cryptocurrency exchanges’ liquidation mechanisms “are not designed to be self-stabilizing the way that TradFi mechanisms are (circuit breakers, etc.)” and instead focus solely on minimizing insolvency risks. Qureshi notes that cryptocurrencies are a “long series” of “bad things” happening, but historically, the market eventually recovers.

BTC options skew signals traders doubt $72,100 bottom

To determine if professional traders flipped bearish after the crash, one should assess BTC options markets. During periods of stress, demand for put (sell) instruments surges, pushing the delta skew metric above the 6% neutral threshold. Excess demand for downside protection typically signals a lack of confidence from bulls.

The BTC options delta skew reached 13% on Wednesday, a clear indication that professional traders are not convinced Bitcoin’s price has found a bottom at $72,100. This skepticism stems partly from fears that the tech sector could suffer from increased competition as Google (GOOG US) and AMD roll out proprietary artificial intelligence chips.

Related: Bitcoin open interest falls by $55B in 30 days–What’s next for BTC price?

Another source of discomfort for Bitcoin holders involves two unrelated and unfounded rumors. First, a $9 billion Bitcoin sale by a Galaxy Digital customer in 2025 was previously attributed to quantum computing risks. However, Alex Thorn, Galaxy’s head of research, denied those rumors in an X post on Tuesday.

The second speculation involves Binance’s solvency, which gained traction after the exchange faced technical issues that temporarily halted withdrawals on Tuesday. Current onchain metrics suggest that Bitcoin deposits at Binance remain relatively stable.

Given the current uncertainty in macroeconomic trends, many traders have opted to exit cryptocurrency markets. This shift makes it difficult to predict whether Bitcoin spot ETF outflows will continue to apply downward pressure on the price.