Bitcoin Miners Risk Regretting AI Pivot Amid Downturn

Bitcoin miners are redirecting billions of dollars and scarce power capacity toward artificial intelligence (AI) as Bitcoin's downturn pushes mining profitability close to historic lows.

Data from CryptoSlate shows that Bitcoin is trading around $64,000, nearly 50% below its October peak. Elevated network competition and weak transaction fees continue to squeeze miner revenue.

Bitwise Europe believes that miners may be making the shift at the wrong point in the cycle. Expectations for AI compute demand could take longer to materialize than current investment implies, while Bitcoin is approaching the end of its downturn.

This creates a potential timing problem: miners could spend the next year committing capital and power capacity to AI just as a recovery in Bitcoin prices restores the economics of mining.

Dragosch therefore believes some miners making the pivot today could regret the decision within the next 12 months.