Bitcoin Miners Bet Big on AI, But Will Regret It?

Bitcoin miners are redirecting billions of dollars and scarce power capacity towards artificial intelligence due to declining profitability in Bitcoin mining. The current downturn, with BTC trading around $64,000 - nearly 50% below its October peak - has led to increased competition for shrinking rewards and lower transaction fees.

Data from CryptoSlate shows that miner revenue has declined nearly 40% year over year, averaging roughly $28.5 million over a 30-day period. This decline in profitability has made AI infrastructure more attractive as data-center customers can pay substantially more for reliable electricity and long-term capacity.

Some of the industry's largest operators are already converting facilities, signing multi-year computing contracts, and pulling back from investment in new Bitcoin mining equipment. However, André Dragosch, head of research at Bitwise Europe, warns that miners may be making this shift at the wrong point in the cycle.