The bitcoin mining industry is experiencing the most fundamental change in its history, and the clearest sign isn’t the hashrate or the difficulty adjustments. And it’s the balance sheets,’ .
The Q1 2026 mining report, published this week by CoinShares, shows that the average cash cost of one bitcoin among publicly listed miners increased to around $79,995 in Q4 2025.
The $68,000 to $70,000 band has been a trading for Bitcoin, with ‘A coinDesk report last week estimated losses of $19,000 per $BTC mined.
The industry knows that these numbers don’t support the way they do — a number of s are. It’s also been a wholesale shift towards artificial intelligence infrastructure that is changing what these companies actually are, the response has said.
According to the CoinShares report, “more than $70 billion in cumulative AI and high-performance computing contracts have been announced across the public mining industry.” CoreWeave has negotiated an expanded contract with core Scientific for $10, which is worth $10. Over the course of 12 years, has a total of 2 billion. TeraWilf $12. A total of 8 billion in contracted HPC revenue is. Hut 8 signed a $7 billion, 15-year lease for AI infrastructure at its River Bend campus. Several billion-dollar deals are signed between Cipher Digital and Google-backed Fluidstack, which has been the multi-billion-pound deal with digital giant.
Listed miners could earn up to 70% of their revenue from AI by the end of 2026 (upfrom about 30% today). Core Scientific already has 39% of its AI colocation revenue. TeraWulf 27% – . Currently at 9 per cent, IREN is rapidly scaling with up to 200 megawatts of liquid-cooled GPU capacity under construction and has been shown as an efficient processor.
That means these mining companies are increasingly becoming data center operators that happen to still mine bitcoin on the side.
Why is cited in the economics? coinshared, said CoinShares that the cost difference between bitcoin mining infrastructure at around $700,000 to $1 million per megawatt and AI infrastructure $8 million to $15 million a megawk is wide but AI provides structurally more stable returns.
In early March, Hash price, the metric that determines miner revenue per unit of computing power, reached an all-time post-halving low (about $28 to $30 per petahash per day) after it was cut.
Mid-generation hardware miners at those levels need to have electricity below $0 for power. A minimum of 05 per kilowatt-hour to keep cash-profitable. Meanwhile, AI infrastructure contracts promise margins of more than 85% with multi-year revenue visibility.
How the financials work
The transition is being financed in two ways, and both are visible in the data, the report explained.
Firstly debt. In fundamental ways, however, the aggregate leverage of the sector has shifted in favour of . IREN now has $3 for . Across five series, convertible notes total 7 billion in each of the seven series are issued. TeraWulf $5 – . total debt of 7 billion (including convertible notes and senior secured notes at its compute subsidiary) with.
Cipher Digital issued $1 for . In November, senior secured notes were issued with 7 billion in its quarterly interest expense of $3 and jumped from $1 to $. $13 for the first nine months to 2 million. In Q4 alone, 4 million were in the box of s. These are not debt loads of mining scales, and they do not represent these. These include bets on infrastructure-scale betrays that the AI revenue will materialize quickly enough to meet the obligations.
Secondly, bitcoin sales are for sale of . A group of publicly listed miners have collectively reduced their $BTC treasuries by more than 15,000 $BC from peak levels to lower the total number of U.S.$T in its $CTC (the highest level) TREasures, which they say are under “high” status. In January, Core Scientific sold about 1,900 $BTC for $175 million and is aiming to sell much of the remaining holdings in Q1 2026. In February, Bitdeer dropped its treasury to zero in the case of Bitdeser. The $162 million deal for 1,818 $BTC was sold to Riot Platforms in December at a price of 1.819 $.
In its March 10-K filing, the largest public holder at 53,822 $BTC, Even Marathon quietly expanded its policy to approve sales from its entire balance sheet reserve — partly under pressure of its $350 million bitcoin-backed credit facility where loan-to-value ratio rose to 87% as prices fell toward $68,000.
These companies are the miners selling bitcoin to fund AI buildouts, whose mining operations secure the bitcoin network. At the heart of the transition, that tension is created by that phrasing. If mining is unprofitable and AI is profitable, the rational economic decision is to invest capital away from mining. If enough miners do that, the security budget of a network is reduced when it’s security costs are cut.
This has already been reflected in the hashrate data of . The network topped the 1,160-ahashes per second peak of early October 2025 and has since dropped to about 920 EH/s, with three consecutive negative difficulty adjustments — the first such streak since July 2022.
Similarly, the bifurcation has already been priced at an valuation market that is in line with its valuation model. Now Miners with secured HPC contracts trade at 12. Sales of next-twelve-months were 3 times by . The trade for pure-play miners is 5. 9 s. That means the incentive to pivot further is reinforced by a market exposure that is paying more than double for the AI exposure, which has been shown in part as an important factor in this effort.
In contrast, while the geographic picture is shifting with that of the economics, it’s a shift in geography. Around 68% of global hashrate is now under the control of United States, China and Russia. The U is a with the meaning of “The U.” A , S. About 2 percent of market share in Q4 alone was a gain for , who gained about two percentage points.
But emerging markets are stepping into the picture as s enter. In addition, Paraguay and Ethiopia have joined the world’s top 10 mining countries (hive based on HIVE’S 300-megawatt operation in Para Guayana; Bitdeer’ 40-million-watt facility in Ethiopia).
Hashrate forecasts and estimates
coinshare, which predicts the network hashrate will hit 1 with. By the end of 2026 8 zetahashes and one month later, by March 2027 2 zingaHashes were added to s.
That forecast is based on bitcoin recovering to $100,000 by year-end, but that prediction depends on the return of bitcoin to $100. CoinShares says that if prices are below $80,000, the hash price will continue to fall and the Hashrate would further decline as more miners leave.
A sustained move below $70,000 could trigger larger capitulation that, paradoxically, benefits survivors through lower difficulty.
The next-generation hardware is a lifeline for future generations of s. During the first half of 2026, Bitmain’s S23 series andbitdeer’S proprietary SEALMINER A3, both operating below 10 joules per terahash, are expected to be scale. Compared to current mid-generation fleets, these machines would roughly cut the energy cost per bitcoin. They are deployed but capital-intensive, and a lot of miners are going to be thinking at AI instead.
As a group of companies that secured the network and collected bitcoin, this cycle was entered by an industry known as Bitcoin mining which led to its acquisition of bitcoin. Assuming it is exiting as a group of companies that build AI data centers and sell bitcoin to fund them, it’s becoming one of the groups which buy their own bitcoin.
That’s a short response to unfavorable economics or permanent structural change the price of bitcoin is one variable, whether that’ll be reversal? Mining margins recover and the AI pivot slows down if it returns to $100,000, mining margin. But if it is at $70,000 or less, the transition speeds up and that mining sector which existed in the last decade still disappears into something else entirely completely.
Thanks for reading Bitcoin miners are becoming AI companies and selling their BTC to fund the transition
