Miners Ditch Crypto Roots For AI Gold Rush

Publicly listed Bitcoin miners are rapidly transitioning their focus away from cryptocurrency mining and towards artificial intelligence infrastructure. According to CoinShares, these companies are on track to generate around 70% of their combined revenue from AI by December, up from about 30% today.

This shift is a result of significant investments in AI contracts, with over $70 billion in cumulative agreements announced across the public mining sector.

The move follows a brutal quarter for miners, with hashprice, a measure of daily revenue per petahash, falling to around $29, levels last seen after the April 2024 halving. Bitcoin mining gross margins have dropped to roughly 60%, down from above 90% during the 2021 bull run.

James Butterfill, CoinShares head of research, noted that AI offers 'structurally higher and more stable returns than mining,' with cloud margins near 85%. Matthew Kimmell, investment strategist at CoinShares, said the transition could mark the end of an era for large US miners, citing thin margins and hashprice hitting bottoms.