Bitcoin Miners Ditch Crypto Roots as AI Takes the Helm

Bitcoin miners are undergoing a significant transformation as they shift their focus from cryptocurrency mining to artificial intelligence infrastructure. According to CoinShares, public listed Bitcoin (BTC) miners are on track to generate approximately 70% of their combined revenue from AI by December, up from around 30% today.

This projected change 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.

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

Companies have aggressively moved into AI infrastructure, with Core Scientific expanding its CoreWeave deal to $10.2 billion over 12 years, TeraWulf having $12.8 billion in contracted HPC revenue, and Hut 8 signing a $7 billion lease. MARA Holdings sold over $1 billion in Bitcoin to fund the transition.