Cipher Mining Inc. (CIFR) shares are catching a nice tailwind Thursday, and there's an interesting story behind the rally.

The Data Center Effect

The likely catalyst? A massive deal announced by Hut 8 Corp (HUT) on Wednesday that's sending positive signals across the entire sector. Hut 8, another former Bitcoin miner that's pivoted to AI infrastructure, just unveiled a 15-year, $7.0 billion lease agreement with Fluidstack for 245 megawatts of IT capacity at its River Bend campus in Louisiana.

That's the kind of deal that makes investors sit up and pay attention. It's strong validation that companies can successfully reinvent themselves, transitioning from cryptocurrency mining to data center operations serving the AI boom.

Cipher is on a similar path. The company recently locked in its own $5.5 billion data center deal with Amazon Web Services, plus a hosting agreement with the same Fluidstack that just partnered with Hut 8. So when Hut 8 lands a landmark transaction, it effectively proves the playbook works.

Bitcoin Adds Some Spice

Bitcoin (BTC) volatility is probably contributing to the action too. The cryptocurrency jumped 2.7% to nearly $89,000 after a softer-than-expected CPI report before pulling back later in the session. U.S. consumer prices rose just 2.7% year-over-year in November, well below economist expectations of 3.1%. That inflation surprise lifted broader markets and crypto-adjacent stocks along with it.

Price Action: Cipher shares were trading up 5.42% at $15.17 at the time of publication Thursday.