Bitcoin Hashrate Plummets Amid AI-Powered Shift

Rapha Zagury, CEO of Twenty One Capital, warns that Bitcoin's hashrate is experiencing its first 'bear market' in history. The hashrate has been declining since October 2025 and has not yet recovered to a record high.

Zagury attributes the decline to the increasing appeal of artificial intelligence (AI) to mining infrastructure owners. Data centers built for Bitcoin can offer power, land, and grid connections that AI companies value, giving miners an alternative to dedicating their entire infrastructure to Bitcoin.

Bitdeer and Hut 8 are among the companies redirecting their resources towards AI infrastructure. Bitdeer signed a $4.7 billion agreement with a Norwegian data center for 121 megawatts of computing capacity, while Hut 8 secured a $9.8 billion lease covering 352 megawatts at its Texas campus.

Zagury believes that large public miners are increasingly reconsidering pure-play Bitcoin mining and that AI may be pulling infrastructure away from Bitcoin.