Author: Shaurya Malwa

Translation: Shen Chao TechFlow

The industry is undergoing its most fundamental transformation since its inception: over $70 billion in AI/HPC contracts have already been signed, listed mining companies have sold off more than 15,000 BTC, and companies like IREN and TeraWulf have taken on billions in debt. By the end of 2026, some mining companies may see AI revenues accounting for 70% of their income. They are transitioning from Bitcoin miners to data center operators that happen to still mine Bitcoin. The core contradiction lies in the fact that the companies that secure the Bitcoin network are the same ones shifting from selling coins to AI, with hash power having fallen from a peak of 1,160 EH/s to about 920 EH/s.

• The Bitcoin mining industry is experiencing its most fundamental transformation since its inception, and the clearest signal is not hash power or difficulty adjustments, but rather the balance sheet.
• The mining report released by CoinShares this week indicates that the weighted average cash cost of mining one Bitcoin for listed miners rose to about $79,995 by Q4 2025.
• Bitcoin has been trading in the $68,000-70,000 range, and a report from CoinDesk last week estimated a loss of about $19,000 for each BTC mined.
• This number is unsustainable, and the industry is well aware of it. The response is a full pivot to AI infrastructure—this is reshaping the essence of these companies.

According to the CoinShares report, listed mining companies have collectively announced AI and high-performance computing (HPC) contracts worth over $70 billion. The expanded agreement between CoreWeave and Core Scientific is valued at $10.2 billion and spans 12 years. TeraWulf has secured $12.8 billion in HPC contract revenue. Hut 8 has signed a $7 billion AI infrastructure lease for 15 years in the River Bend campus. Cipher Digital has signed a multi-billion dollar agreement with Fluidstack, backed by Google.

By the end of 2026, AI revenue for listed miners could account for as much as 70%, up from about 30% currently. AI hosting revenue at Core Scientific already represents 39% of total revenue. TeraWulf stands at 27%. IREN is currently at 9% but is rapidly expanding, with an under-construction liquid-cooled GPU capacity of up to 200 megawatts.

This means that these mining companies are increasingly resembling data center operators, merely still mining Bitcoin by chance.

The economic calculations explain the reasons. CoinShares data shows that the cost of Bitcoin mining infrastructure is about $700,000 to $1 million per megawatt, while AI infrastructure costs around $8 million to $15 million per megawatt. The gap is significant, but AI provides structurally higher and more stable returns.

The hash price—a metric that measures the revenue per unit of hash power for miners—fell in early March to a historic low post-halving, at about $28-30 per PH per day.

At this level, miners using mid-generation mining machines need an electricity price of less than $0.05 per kWh to maintain cash profitability. In contrast, the profit margin promised by AI infrastructure contracts exceeds 85%, with revenue guarantees spanning several years.

Where Does the Money for Transformation Come From?

The CoinShares report highlights two sources of funding for this transformation, both clearly visible in the data.

First, debt. The entire industry's level of leverage has undergone a qualitative change. IREN is now carrying $3.7 billion in convertible notes, divided into five series. TeraWulf has a total debt of $5.7 billion, consisting of convertible bonds and secured notes backed by its hashing subsidiary.

Cipher Digital issued $1.7 billion in secured notes in November, causing its quarterly interest expenses to soar from $3.2 million in the previous nine months to $33.4 million in just Q4. This is not a mining-level debt burden; it is infrastructure-level wagering—betting that AI revenue will grow fast enough to cover debt obligations.

Second, selling coins. Listed miners have cumulatively reduced their holdings by more than 15,000 BTC from peak levels. Core Scientific sold about 1,900 BTC (worth $175 million) in January and plans to clear almost all remaining holdings in Q1 2026. Bitdeer cleared its holdings in February. Riot Platforms sold 1,818 BTC (worth $162 million) in December.

Even the largest publicly-listed holder, Marathon (holding 53,822 BTC), has quietly expanded its policy in its March 10-K annual report to authorize the sale of holdings from its entire balance sheet reserve. Part of this is due to pressure from its $350 million Bitcoin collateralized credit line—as prices drop toward $68,000, the loan-to-value (LTV) ratio has risen to 87%.

Who Will Protect the Bitcoin Network?

The ones selling coins to engage in AI are precisely the companies that secure the Bitcoin network through mining operations. This creates the core contradiction of this transformation. When mining becomes unprofitable and AI very profitable, the rational economic decision is to divert funds away from mining. However, if enough miners do this, the security budget for the network will shrink.

Hash power data has already reflected this. The network's hash power peaked at about 1,160 EH/s in early October 2025 and has since declined to around 920 EH/s, experiencing three consecutive negative difficulty adjustments—for the first time since July 2022.

Valuation Divergence

The market has already priced in this divergence. Mining companies with signed HPC contracts are currently trading at 12.3 times their projected revenue for the next 12 months. Pure mining companies are valued at only 5.9 times. The market is paying over double the premium for AI exposure, which further reinforces the transformation motivation.

The geographical landscape is also changing. The United States, China, and Russia currently control about 68% of global hash power. In just Q4, the U.S. increased its market share by approximately 2 percentage points. However, emerging markets are also entering the scene—Paraguay and Ethiopia have entered the global top ten mining countries, powered respectively by 300 megawatts from HIVE and 40 megawatts from Bitdeer.

Hash Power Forecast

CoinShares predicts that network hash power will reach 1.8 ZH/s by the end of 2026 and 2 ZH/s by the end of March 2027 (a month later than previously predicted).

However, this forecast assumes that Bitcoin returns to $100,000 by the end of the year. If prices remain below $80,000, CoinShares anticipates that hash prices will continue to decline, hash power will further drop, and more miners will exit. A continued drop below $70,000 could trigger a larger-scale capitulation—ironically benefiting the survivors by lowering difficulty.

A new generation of hardware offers a potential lifeline. Bitmain's S23 series and Bitdeer's self-developed SEALMINER A3 both achieve energy efficiency below 10 joules/TH and are expected to be shipped in large quantities in the first half of 2026. These mining machines can approximately halve the energy cost per Bitcoin compared to currently mainstream mid-generation models. But deploying them requires funding—while many miners are channeling money into AI.

At the start of this cycle, the Bitcoin mining industry consisted of companies that protected the network and hoarded Bitcoin. It is exiting this cycle under a different identity: a group of companies that build AI data centers and sell Bitcoin to finance them.

Is this a temporary response to an unfavorable economic environment or a permanent structural change? It depends on one variable: the price of Bitcoin. If it returns to $100,000, mining profits will recover, and the AI transformation will slow. If it stagnates at $70,000 or lower, the transformation will accelerate, and the mining focused on in the last decade will continue to vanish into something entirely different.

免责声明：本文章仅代表作者个人观点，不代表本平台的立场和观点。本文章仅供信息分享，不构成对任何人的任何投资建议。用户与作者之间的任何争议，与本平台无关。如网页中刊载的文章或图片涉及侵权，请提供相关的权利证明和身份证明发送邮件到support@aicoin.com，本平台相关工作人员将会进行核查。