Bitcoin Mining Shakeout: Major Players Exit or Reduce Operations Amid Falling Revenue

A shakeout in Bitcoin mining is underway as several major players are either exiting or significantly reducing their operations. According to CoinShares, Core Scientific (CORZ) paid $41.9 million to cancel a chip order from Block's Proto division, while Keel Infrastructure (KEEL) has stopped mining entirely and will record zero revenue in the third quarter.

Core Scientific's mining operation was loss-making, with a gross margin of -56% in the second quarter, as it operated its remaining rigs to offset contractual power obligations. The company also saw its cash cost per Bitcoin exceed its all-in cost due to mining accounting for only 13.12% of its revenue.

Other companies, such as IREN and Cipher Digital (CIFR), are winding down their mining operations, with CoinShares estimating that at least 35 EH/s will leave the listed miner group in the third quarter. This represents a significant portion of the network's total computing power, with hashrate declining by around 4%.

Economist and Bitcoin advocate Saifedean Ammous stated that Bitcoin's electricity consumption may already have peaked, citing falling revenue and dollar devaluation as key factors. He noted that AI data centers are becoming increasingly attractive to miners due to their higher profit margins compared to mining.