Texas Hits Pause on Data Centers. Some Bitcoin Miners Already Cleared the Gate

Texas voters elected Gina Hinojosa governor on Tuesday, and she's promising to keep new data center approvals on ice until the legislature writes the rules. The freeze didn't start with her, though. Gov. Greg Abbott got there first, ordering state regulators to stop signing off on data centers back in September. Judging by Hinojosa's campaign talk, that pause now looks set to outlast the audit deadline it was built around.

Abbott's crackdown came in two moves. In August he told the Public Utility Commission of Texas and grid operator ERCOT to audit every data center working its way through ERCOT's interconnection process before approving any more. Then on Sept. 21 he told the Texas Commission on Environmental Quality to halt data center permits. 'Until they do, TCEQ will issue no permits sought by data center projects,' Abbott said at the time. ERCOT's audit report is due around Dec. 10.

The next domino falls Jan. 19, when Hinojosa takes office — a week after lawmakers convene for a session that runs to May 31. Democrats won the Texas House, but Republicans kept a 19-12 majority in the state Senate. Bernstein analyst Gautam Chhugani reportedly wrote that he expects the data center pause to continue and any related legislation to stay stuck in 'gridlock.' Democrats also won Congress, though that matters less here: the Federal Energy Regulatory Commission doesn't regulate power lines running entirely inside ERCOT's grid.

Bernstein cut price targets on seven of these miners Wednesday, dropping them by 35% to 54% and citing tighter financing markets plus broad Texas uncertainty. The targets moved together because the firm lowered a single valuation multiple across the whole group. By the outlet's count from those targets, Riot's fell 49%, TeraWulf's 44% and IREN's 45%. Chhugani named IREN, Riot and Cipher as the most exposed to Texas, but noted their already-approved gigawatt-scale power 'may be considered scarce and valuable' if new rules make it harder for rivals to connect.

Here's the part megawatt counts don't tell you: a freeze only bites approvals that haven't been granted yet — a grid classification, an environmental permit, a tenant still unsigned. TeraWulf sold its only Texas asset, a joint-venture stake, this quarter, and Riot's leased capacity sits on grid connections approved years ago. CleanSpark and Galaxy, by contrast, still have large Texas pipelines waiting in line. That divide sorts Riot, Galaxy, Core Scientific, Cipher, IREN, Hut 8, MARA, CleanSpark and TeraWulf into very different risk buckets.

The market already ran its own version of that math. On Nov. 4, Cipher fell 20% while the Nasdaq-100 rose about 1%, and CleanSpark and Galaxy each slid roughly 17%. TeraWulf, Applied Digital and MARA lost less than 7%, Riot climbed 10% on its lease news, and Hut 8 dropped 23% on its own results. Every one of those names had jumped at least 10% on Election Day itself — then the whole AI trade sold off together on Nov. 5.