In April 2024, Bitcoin underwent its fourth-ever halving, slashing the block reward from 6.25 BTC to 3.125 BTC. At the time, most industry observers expected that a price rally would offset the impact of reduced rewards. However, the market’s trajectory over the following two years didn’t play out as anticipated.
As of April 21, 2026, Gate market data shows Bitcoin trading at $75,674.7, down roughly 40% from its all-time high of about $126,080 in October 2025. Meanwhile, total network hashrate peaked at approximately 1,160 EH/s at the end of 2025, diluting mining revenue per unit of hashrate significantly. The dual pressure of rising costs and falling revenues has pushed miners into a structural profitability crisis.
According to a mining report published by CoinShares in March 2026, the weighted average cash cost for publicly listed miners to produce one Bitcoin soared to around $79,995 in Q4 2025. During the same period, Bitcoin’s trading price fluctuated between $70,000 and $75,000. This means that even before factoring in equipment depreciation and capital expenditures, some miners were already operating at a cash cost loss. Hashprice—a key measure of miners’ core profitability—fell to just $28–$30 per PH/s per day in Q1 2026, marking its lowest point since the halving.
Faced with an unsustainable business model, publicly traded mining companies have launched a systematic migration from Bitcoin mining to AI compute infrastructure.
A Cross-Industry Transformation
By the end of March 2026, public mining companies had signed more than $70 billion in AI and high-performance computing (HPC) contracts. CoinShares forecasts that by the end of 2026, up to 70% of leading miners’ revenues could come from AI operations, up from about 30% currently. Miners are evolving from "Bitcoin mining-centric" businesses to a new breed focused on "data center operations with mining as a side business."
The core driver behind this shift is the stark difference in unit economics. Industry analysis shows that AI data centers can generate $200–$500 in revenue per megawatt, compared to just $57–$129 per megawatt for Bitcoin mining—meaning AI’s revenue potential is up to eight times higher. In terms of infrastructure costs, Bitcoin mining setups run about $700,000–$1 million per megawatt, while AI infrastructure requires $8 million–$15 million per megawatt—a substantial investment gap, but one that offers structurally higher and more stable dollar cash flows, decoupled from Bitcoin’s price volatility.
Structural Shifts in Capital and Holdings
Funding for this transformation primarily comes from two channels: leveraged financing and selling Bitcoin reserves.
In Q1 2026, North American public miners sold over 32,000 BTC—surpassing the total for all of 2025 and even exceeding the roughly 20,000 BTC offloaded during the Terra-Luna collapse in Q2 2022, setting a new record for quarterly miner sell-offs. On-chain data from CryptoQuant shows that miners’ Bitcoin holdings dropped from about 1.86 million at the end of 2023 to around 1.8 million, a net decrease of roughly 60,000 BTC in two years. Miners are shifting from hoarding coins in anticipation of price gains to actively liquidating their holdings—a fundamental change in their role.
At the same time, several miners are raising funds for AI buildouts through debt. IREN issued $3.7 billion in convertible bonds, Bitdeer’s total debt has reached $1.3 billion, and operators like TeraWulf and Cipher have taken on billions more to expand their data centers.
Four Miners, Four Transformation Paths
Different miners have adopted distinct strategies based on their own resources, but all are moving in the same direction.
Core Scientific: The Most Aggressive First Mover. In January 2026, Core Scientific sold about 1,900 BTC, raising $175 million, and plans to liquidate its remaining holdings within the year. The company aims to convert its Texas mining facility’s entire 1.3 GW power capacity to AI hosting. Morgan Stanley has provided a $500 million credit line, expandable to $1 billion. Core Scientific’s expanded agreement with CoreWeave is valued at $10.2 billion over 12 years. Currently, AI hosting accounts for 39% of its total revenue.
MARA Holdings: A Pivotal Shift. Once known for its "never sell" policy, MARA revised its treasury strategy in March 2026, authorizing the sale of its entire 53,822 BTC reserve and selling over 13,000 BTC in Q1 alone. MARA signed a joint venture with Starwood Capital to convert part of its mining operations into AI data centers, starting with about 1 GW of capacity and expandable up to 2.5 GW.
TeraWulf: A Model of Steady Diversification. TeraWulf has secured $12.8 billion in HPC contract revenue, with AI now accounting for 27% of its income. The company’s early and measured approach to transformation has made it one of the more highly valued names in the capital markets.
Bitdeer: Liquidating Holdings, Accelerating Expansion. Bitdeer opted to sell all its BTC holdings for liquidity, speeding up its acquisition of power and land. Its self-mining hashrate has climbed to 63.2 EH/s, overtaking MARA as the world’s largest public miner by proprietary hashrate.
Network-Level Ripple Effects
The large-scale migration of mining resources has had real implications for Bitcoin network security.
Network hashrate dropped from its 2025 peak of about 1,160 EH/s to around 920 EH/s—a loss of over 200 EH/s. On March 20, 2026, Bitcoin saw its second-largest difficulty adjustment of the year, with a nearly 8% drop, briefly pushing hashrate below the 1 ZH/s threshold. Around April 18, 2026, network difficulty fell again by about 4.91%, from 139.0 trillion to 132.1 trillion. Multiple consecutive downward adjustments have historically signaled large-scale miner capitulation.
Charles Edwards, founder of Capriole Investments, voiced concerns, citing forecasts that the average share of Bitcoin revenue for top public miners could fall to 30% over the next three years. He noted, "If even half these numbers are accurate, the energy and commitment invested in Bitcoin are facing a major threat."
Diverging Market Valuations
Capital markets have responded clearly to miners’ strategic pivots. Miners with HPC contracts are valued at about 12.3 times their projected revenue for the next 12 months, while pure-play mining companies are valued at just 5.9 times—more than a twofold difference. This signals that investors no longer see these firms as "Bitcoin leverage plays," but rather as "infrastructure operators" priced on their power assets and data center capabilities.
New Risks: AI Compute Infrastructure and Mining Security
The shift to AI compute infrastructure is more than a simple business pivot—it introduces a whole new spectrum of risks.
On the hardware side, security threats are emerging. In the second half of 2025, researchers discovered a global attack campaign dubbed ShadowRay 2.0. This attack exploited an unpatched authentication vulnerability (CVE-2023-48022, CVSS score 9.8) in the open-source AI framework Ray, turning infected NVIDIA GPU clusters into self-replicating crypto-mining botnets. Attackers leveraged Ray’s legitimate orchestration features to propagate malicious payloads worldwide. For miners transitioning from Bitcoin ASICs to GPU clusters, their AI compute infrastructure could become targets for similar attacks—hackers don’t need to crack blockchain cryptography; exploiting vulnerabilities in AI frameworks can let them hijack GPU resources.
On the financial side, the risks are just as significant. Many miners have taken on substantial debt to fund AI infrastructure, pushing leverage ratios higher. If AI compute demand or contract execution falls short of expectations, financial pressures could escalate rapidly.
Conclusion
The mass migration of Bitcoin miners into AI compute isn’t just a reactive move to profitability pressures—it’s a structural shift involving the repricing of compute assets, redirection of capital flows, and a reshaping of network security. The 2024 halving exposed the fragility of Bitcoin mining’s economic model, while surging AI demand has given miners an alternative path to survival. $70 billion in contracts, 32,000 BTC sold in a single quarter, and a network hashrate plunge of over 200 EH/s—all point to an accelerating trend: the boundaries between mining and AI compute are dissolving, and Bitcoin’s decentralized foundation is facing its most profound test since inception.
