The remaining miners are actually doing better.

Written by: Cathy

In April 2024, the Bitcoin network completed its fourth halving. The block reward was cut from 6.25 BTC to 3.125 BTC, halving the revenue of mining companies overnight.

Everyone thought a batch of miners would perish.

But they didn’t die. Not only did they survive, but they also signed contracts worth hundreds of billions of dollars, issued investment-grade bonds, and their profit margins are even higher than during the peak mining periods.

IREN secured a $970 million five-year GPU cloud service order from Microsoft, and signed a $340 million contract with Nvidia. Applied Digital's signed contractual income exceeded $31 billion. Hut 8 issued $4.25 billion in non-recourse senior secured bonds in Texas, with a face interest rate of only 6.129%.

This is not the numbers of crypto companies. These are the numbers of infrastructure giants.

A year ago, Wall Street referred to these companies as “leveraged Bitcoin derivatives.” Now, they hold irrevocable three-package leases for 15 years, with clients like Microsoft, Nvidia, and CoreWeave, locking in profit margins between 80% and 90%.

When did mining companies become “digital landlords”?

How much a megawatt is worth determines everything

The answer lies in a set of comparisons.

The same one megawatt of electricity capacity used for mining Bitcoin experiences revenue fluctuations tied to currency prices, with profits squeezed by the combined pressures of network computational power and electricity prices. However, renting this megawatt to AI companies to host GPU clusters generates three times the revenue of traditional mining, with operational profit margins stabilizing at 80% to 90%, and contracts spanning 10 to 15 years.

More critically, there's a valuation gap. Traditional data center REITs have an enterprise value of about $31 million per megawatt, whereas the implicit value of transitioning mining companies is only $4.9 million. A more than sixfold price difference represents the largest arbitrage window on the street.

IREN is the most aggressive player. This company made an almost unimaginable decision in the crypto space: not to leave a single Bitcoin in its treasury.

All liquid capital is invested in AI cloud infrastructure, signing procurement orders for servers and liquid cooling with Dell totaling over $930 million, aiming to expand its GPU cluster to 150,000 cards by the end of 2026. To fund this crazy plan, IREN raised $9.3 billion in eight months and secured $3.65 billion in investment-grade GPU-specific financing.

A mining company that was once called Iris Energy now has an annual recurring revenue target of $3.7 billion.

The story of Galaxy Digital is more like a bottom-fishing comeback. In 2022, Mike Novogratz spent less than $100 million to buy the Helios mine in Dickens County, Texas, from the brink of bankruptcy of Argo Blockchain.

Now this park has received a grid-approved capacity of 1.6 gigawatts, with CoreWeave leasing the entire initial 800 megawatts under a 15-year triple-net lease, with annual revenues exceeding $1 billion at full capacity, and an EBITDA profit margin of 90%.

A mine purchased for less than $100 million has transformed into a supercomputer real estate generating $1 billion annually.

Shuttered ventilation fans can't accommodate AI

However, signing contracts is one thing; delivery is another.

Traditional Bitcoin mining facilities have extremely rudimentary cooling solutions: large shutters, big ceiling fans, with insects and dust flying around in the air, having a limited impact on the lifespan of mining machines, as ASIC miners are consumables anyway. The power density of single-machine cabinets rarely exceeds 15 kilowatts, and the electricity quality is not stringent; if the grid voltage fluctuates, the mining machine just needs a reboot.

The world of AI operates under an entirely different set of rules. The power consumption of a single cabinet using Nvidia's GB200 NVL72 architecture can reach 120 to 140 kilowatts, with heat generation approaching the physical limits of air cooling. During parallel training with tens of thousands of GPUs, the chips engage in ultra-high-density gradient synchronization, where any slight voltage fluctuation in the grid can interrupt communication, causing collapse of training processes lasting several weeks.

This means that transforming the mining facility involves more than just replacing a few devices. The power system needs to install large battery energy storage units and active filters, the distribution network must transition from single-channel to dual-channel independent redundancy, and diesel generator sets and 48-hour full-load oil reserves must also be deployed onsite.

Cooling must switch completely from open air cooling to direct chip liquid cooling, sealing all factory shutters, and adding high-density cooling distribution units to the outer walls. Not to mention networking, where mining machines only require megabyte-level basic connectivity, while AI clusters need InfiniBand lossless fiber backbones and dark fiber remote access.

Transitioning from Tier 0 to Tier 3, every step costs real money.

Ironically, just as mining companies pulled away from the "heaviness" of crypto assets, they turned around and dove into the "heavier" burden of AI infrastructure. Applied Digital's Delta Forge 1 single park investment is $3.6 billion; Hut 8's Beacon Point project issued $4.25 billion in bonds for construction. These companies did not acquire lightweight SaaS subscription contracts but rather solid steel and concrete, along with liquid cooling pipelines.

Those who left made profits, and those who stayed didn't lose

The collective exodus of mining companies toward AI has left a mark on the Bitcoin network’s ledger.

From the end of 2025 to mid-2026, as leading mining companies like IREN, Galaxy, and Core Scientific shut down self-operated mining rigs and dismantled old facilities, the total computational power of the Bitcoin network plummeted from a historical high of 1.442 ZH/s to around the current 0.888 ZH/s. In mid-June 2026, the network triggered a -10.09% difficulty adjustment, marking the second largest drop in Bitcoin's difficulty for 2026. However, there is a paradoxical result: the remaining miners are actually doing better.

A sharp drop in difficulty means that the same computational power can mine more coins. CleanSpark, with its efficient self-operated fleet of 50 EH/s, has reduced its production cost to $43,000 per coin, with a stable gross margin exceeding 40%. Those who left profited from the AI contract premium, while those who stayed reaped the rewards from the redistribution of computational power.

However, cracks are also spreading.

The biggest risk faced by transitioning mining companies is not technology but concentration. The high-performance contracts of Galaxy, Applied Digital, and Core Scientific primarily rely on CoreWeave as the main client.

This venture-capital-backed AI cloud service provider operates with extremely high leverage, relying on GPU collateral refinancing to sustain operations. If AI commercialization underperforms expectations and tech giants significantly cut budgets, both CoreWeave and the string of mining companies tied to it will simultaneously come under pressure.

A more pressing issue is delivery. The production capacity of Nvidia's Blackwell-class GPUs will remain saturated until at least 2027, as Microsoft and Meta have locked in most forward quotas through deals worth hundreds of billions of dollars. Currently, among the entire transitioning mining company group, only about 25% of the IT capacity has completed supercomputing transformation and gone live. The remaining 75% of contracts remain on paper.

Delays in power-up mean penalties for breach of contract, nullification of leases, and valuation collapse.

The most valuable might not be the choice itself

The numbers from contracts are indeed astonishing. However, once the $31 billion in contracts, $4.25 billion in bonds, and $1 billion annual rental figures are digested by the market, too many optimistic expectations are already factored into the pricing.

What may truly provide peace of mind for the endgame is not whether mining companies chose AI or Bitcoin, but rather a mixed computing model where both coexist.

The high-performance AI racks bear stable foundational loads through rigid 15-year leases, while Bitcoin mining machines utilize their flexibility for instant on/off capability to consume excess power during nighttime and off-peak periods. One side earns certainty, while the other side thrives on volatility.

Mining companies have never been about mining Bitcoin. They mine electricity.

Whoever controls the electricity is the landlord. But the landlord must also build the house to collect the rent.