Bitcoin Miners Abandon Crypto Roots as AI Dominance Looms

Publicly listed Bitcoin (BTC) miners are rapidly transitioning their focus from traditional cryptocurrency mining to artificial intelligence infrastructure. According to CoinShares, a digital asset manager, these miners will generate approximately 70% of their combined revenue from AI by December, up from around 30% today.

This shift follows a brutal quarter for miners, with hashprice - the measure of daily revenue per petahash - falling to around $29, levels last seen after the April 2024 halving. Bitcoin mining gross margins have dropped to roughly 60%, down from above 90% during the 2021 bull run.

Companies are aggressively moving into AI and high-performance computing contracts. Core Scientific expanded its CoreWeave deal to $10.2 billion over 12 years, while TeraWulf has $12.8 billion in contracted HPC revenue and Hut 8 signed a $7 billion lease. MARA Holdings sold over $1 billion in Bitcoin to fund the transition.

James Butterfill, CoinShares head of research, noted AI offers structurally higher and more stable returns than mining, with cloud margins near 85%. Matthew Kimmell, investment strategist at CoinShares, said the transition could mark the end of an era for large US miners, adding that margins are thin and hashprice is hitting bottoms.