Bitcoin Miners Abandon Crypto Roots as AI Revenue Surges
Bitcoin miners are rapidly transitioning away from their crypto roots as they increasingly rely on artificial intelligence infrastructure to drive revenue. According to CoinShares, publicly listed Bitcoin (BTC) miners will generate around 70% of their combined revenue from AI by December, up from about 30% today.
The move is a result of the brutal quarter faced by 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.
Industry players such as Core Scientific and TeraWulf have aggressively pursued AI contracts, with more than $70 billion in cumulative commitments announced across the public mining sector. This includes a $10.2 billion deal by Core Scientific to expand its CoreWeave agreement over 12 years, and a $12.8 billion contract from TeraWulf for high-performance computing revenue.
Matthew Kimmell, investment strategist at CoinShares, noted that the transition could mark the end of an era for large US miners, citing thin margins and hashprice hitting bottoms.