Bitcoin Mining's Future May Lie in Energy Source Flexibility

According to Haipo Yang, CEO of ViaBTC, the current trend in the mining industry may lead some to believe that AI is pushing Bitcoin mining out of the market. However, Yang suggests that this narrative oversimplifies the situation.

The recent decline in network hashrate and difficulty adjustment are indeed causing concern among some observers. Core Scientific reported a negative 56% gross margin for self-mining in the second quarter, while its data center colocation business generated nearly $80 million in gross profit. TeraWulf's HPC leasing already accounted for around 71% of total revenue during the same period.

Yang argues that AI is not directly competing with Bitcoin mining for resources such as compute hardware and power. Instead, the competition lies further upstream, where chip capacity, capital, land, power, and existing data center infrastructure are scarce. The ability to access large amounts of reliable power quickly has become particularly valuable.

Yang notes that many mining companies have already secured land, substations, and grid capacity years ago, when these resources were less competitive. AI companies are now willing to pay more for the same infrastructure because they value the time saved by having power already in place.