Losing $19,000 per coin mined: Bitcoin mining companies collectively defect to AI

Author: Shaurya Malwa; Compiled by: Deep Tide TechFlow

CoinShares’ latest mining report shows that the weighted average cost for listed miners to mine one bitcoin has risen to around $80,000, while the current BTC price is $68,000–$70,000—about a $19,000 loss for every bitcoin mined.

The industry is undergoing the most fundamental shift since its inception: more than $70 billion worth of AI/HPC contracts have already been signed, listed miners have cumulatively sold more than 15,000 BTC, and companies such as IREN and TeraWulf have racked up tens of billions of dollars in debt. By the end of 2026, the share of AI revenue for some miners could reach 70%. They are shifting from bitcoin miners to data center operators that just happen to keep mining. The core contradiction is this: it is precisely the companies that ensure the security of the Bitcoin network that are selling their way into AI. Hashrate has fallen from a peak of 1,160 EH/s to about 920 EH/s.

• The bitcoin mining industry is experiencing the most fundamental transformation since it began, and the clearest signal is not hashrate or difficulty adjustments, but the balance sheet.

• CoinShares’ Q1 2026 mining report released this week shows that the weighted average cash cost for listed miners to mine one bitcoin in Q4 2025 rose to about $79,995.

• Bitcoin has been trading in the $68,000–$70,000 range, and CoinDesk’s report last week estimated a loss of roughly $19,000 per BTC mined.

• This number is unsustainable, and the industry knows it. The response is a full pivot to AI infrastructure—which is reshaping what these companies are at their core.

According to CoinShares’ report, listed mining companies have cumulatively announced more than $70 billion in AI and high-performance computing (HPC) contracts. CoreWeave and Core Scientific’s expanded agreement is worth $10.2 billion for 12 years. TeraWulf has signed $12.8 billion in HPC contract revenue. Hut 8 signed a $7.0 billion, 15-year AI infrastructure lease at the River Bend campus. Cipher Digital and Google-invested Fluidstack signed a multi-billion-dollar agreement.

By the end of 2026, the AI revenue share for listed miners could be as high as 70%, while it is currently about 30%. Core Scientific’s AI hosting revenue already accounts for 39% of total revenue. TeraWulf is 27%. IREN is currently 9%, but it is expanding rapidly, with 200 megawatts of liquid-cooled GPU capacity under construction.

This means these mining companies are increasingly looking like data center operators—only they are still mining bitcoin by happenstance.

The economics explain why. CoinShares data shows that the cost of bitcoin mining infrastructure is roughly $0.7–$1.0 million per megawatt, while AI infrastructure is about $8–$15 million per megawatt. The gap is huge, but AI offers structurally higher and more stable returns.

Hash price—the metric that measures miner income per unit of hashrate—fell to a historical low just after the halving in early March, at around $28–$30/PH/day.

At this level, miners using mid-generation rigs need electricity prices below $0.05 per kWh to remain cash-flow profitable. Meanwhile, profit margins promised by AI infrastructure contracts exceed 85%, with multi-year revenue visibility.

Where the pivot money comes from

CoinShares’ report points out that there are two funding sources for this transformation, both clearly visible in the data.

First, taking on debt. The entire industry’s leverage has undergone a qualitative change. IREN now carries $3.7 billion in convertible notes, split across five series. TeraWulf has total debt of $5.7 billion, composed of convertible notes and priority-secured notes from its hashrate subsidiaries.

In November, Cipher Digital issued $1.7 billion in priority-secured notes, causing its quarterly interest expense to jump from $3.2 million over the first nine months to $33.4 million in only Q4. This is not a mining-level debt burden—it is an infrastructure-level bet—that AI revenue will come in fast enough to cover debt service obligations.

Second, selling bitcoin. Listed miners have cumulatively reduced holdings by more than 15,000 BTC from peak levels. Core Scientific sold about 1,900 BTC in January (worth $175 million) and plans to clear nearly all remaining holdings in Q1 2026. Bitdeer will liquidate its holdings to zero in February. Riot Platforms sold 1,818 BTC in December (worth $162 million).

Even the largest listed holder, Marathon (holding 53,822 BTC), quietly expanded its policy in its March 10-K filing, authorizing sales from reserves across its entire balance sheet. Part of the reason is pressure on its $350 million bitcoin-backed credit facility—as the price falls toward $68,000, its loan-to-value (LTV) has risen to 87%.

Who will protect the Bitcoin network?

The ones selling bitcoin to do AI are precisely the companies that operate mining to secure the Bitcoin network. That creates the central contradiction of this transition. When mining isn’t profitable but AI is, the rational economic decision is to move capital out of mining. But if enough miners do this, the network’s security budget will shrink.

The hashrate data already reflects it. Network hashrate peaked at about 1,160 EH/s in early October 2025, then fell to about 920 EH/s, with three consecutive negative difficulty adjustments—its first since July 2022.

Valuation divergence

The market has already priced in this divergence. Miners with signed HPC contracts currently trade at 12.3x next 12 months’ revenue. Pure-play miners trade at 5.9x. The market is paying more than double the premium for AI exposure, further reinforcing the incentive to transition.

The geographic picture is also changing. The U.S., China, and Russia currently control about 68% of global hashrate. Even in just one quarter (Q4), the U.S. added about 2 percentage points of market share. But emerging markets are also getting in—Paraguay and Ethiopia have entered the global top ten mining countries, driven by HIVE’s 300-megawatt and Bitdeer’s 40-megawatt facilities, respectively.

Hashrate forecast

CoinShares expects network hashrate to reach 1.8 ZH/s by the end of 2026 and 2 ZH/s by the end of March 2027 (one month later than its prior forecast).

But this forecast hinges on bitcoin returning to $100,000 by year-end. If the price stays below $80,000, CoinShares’ modelled hash price will continue to decline, causing hashrate to fall further and more miners to exit. Ongoing sustained breaks below $70,000 could trigger a larger-scale capitulation-style clearing—ironically, that would benefit the survivors by lowering difficulty.

Next-generation hardware may offer a potential lifeline. Bitmain’s S23 series and Bitdeer’s custom-built SEALMINER A3 have energy efficiency below 10 joules/TH, and are expected to ship in large volumes in the first half of 2026. Compared with today’s mainstream mid-generation rigs, these miners could roughly halve the energy cost per bitcoin. But deploying them requires capital—while many miners are putting money into AI.

At the start of this cycle, the bitcoin mining industry was a group of companies protecting the network and hoarding bitcoin. It is exiting the cycle in another guise: a group of companies building AI data centers and selling bitcoin to finance them.

So is this a temporary reaction to a hostile economic environment, or a permanent structural shift? It depends on one variable: the price of bitcoin. If it returns to $100,000, mining profits recover and the AI pivot slows. If it stays at $70,000 or lower, the transition accelerates, and the mining-centered industry of the past decade will continue to disappear into something entirely different.