Bitcoin Mining Profitability Hits Record Low as Miners Diversify into AI and HPC
Bitcoin mining profitability has hit an all-time low, according to a report by BitPlanet Research Lab. The report states that large mining companies, including Marathon Digital Holdings and CleanSpark, are selling off significant amounts of mined Bitcoin due to declining revenue.
The report notes that the industry is experiencing its worst hashprice readings on record, with three of the lowest monthly average hashprice readings this year cutting into miners' revenue. In June, monthly mining revenue fell 23% to $836.41 million from $1.086 billion in May, and although it rebounded to $875.35 million in July, this only recovered about 16% of June's decline.
As a result, some miners are exploring alternative uses for their power capacity and land, such as artificial intelligence (AI) and high-performance computing (HPC). The report states that the cumulative value of AI and HPC contracts announced by publicly traded miners exceeded $70 billion as of the first quarter. However, this shift requires significant upfront investment, with estimated costs ranging from $700,000 to $1 million per megawatt for AI infrastructure.
BitPlanet emphasizes that the current shift is not a contraction of the mining industry as a whole, but rather a divergence in strategy based on individual operators' economics. Companies with access to low-cost power and high-efficiency equipment can continue mining, while others may need to convert their facilities to more profitable uses.