Bitcoin Mining Operations Suffer as Declining Revenues and Rising Costs Push Industry Towards Hosted Compute
Bitcoin mining operations are facing significant challenges as the industry grapples with declining revenues and rising costs. In Q2 2026, the listed mining sector fell below cash breakeven in aggregate, with Bitcoin trading at $58,400, less than half its October 2025 all-time high. The hashrate also dropped to around 50% below trend following a six-month decline since the China ban.
The weighted average ex-tax cash cost to produce one bitcoin among listed miners was approximately $75,500 in Q2 2026. Several major players have announced plans to exit or scale back their mining operations, including Keel, which has officially shut down its Bitcoin mining operations and sold a significant portion of its BTC holdings.
The shift towards hosted compute operations is gaining momentum as companies seek to capitalize on the growing demand for data center capacity. The premium placed on existing grid access is becoming increasingly valuable, with recent transactions valuing fully leased AI data centers at around $27m per MW, compared to below $3m per MW for unleased mining capacity.
The regulatory landscape is also playing a significant role in shaping the industry's future. At least 225 moratoriums or restrictions on data center development have been recorded across 30 states, with New York introducing a statewide pause on environmental permits for facilities over 50MW. The US interconnection queue stands at around 2,600GW, more than double the country's installed capacity.