Miners Abandon Ship as Bitcoin Fees Sink to 2019 Levels Amid AI Gold Rush

Bitcoin miners are facing a paradoxical crisis where the coin's price is at an all-time high, but making money from mining it has become harder than ever. The annual amount of transaction fees on the Bitcoin network has fallen to $96 million-$114 million, which is comparable to 2019 levels when BTC was worth just $5,000.

The whole situation is that despite the significant increase in the coin's price - it's now 13 times higher than in 2019 - miners receive the same amount of money for processing transactions. After the recent halving, the share of fees in their revenue fell below 10%, and with the current mining cost at around $62,650, the business's net margin has shrunk to a critical 5%. This means that mining on older equipment has become unprofitable.

However, instead of going bankrupt, publicly traded mining companies have found a gold mine in high-performance computing (HPC) and AI. They are signing multibillion-dollar contracts with IT giants such as Microsoft and Nvidia, which provides them with fixed, guaranteed dollar payments.