Bitcoin mining enters a new era: from "energy battleground" to "AI hub" industry rebirth

When Bitcoin prices hover around $87,700 USD, the once highly profitable business is undergoing a thorough business model overhaul. But this winter has also spawned an unexpected opportunity—mining is becoming a new frontier for artificial intelligence infrastructure.

Dilemma: Traditional mining profits collapse

Data doesn’t lie. Hash price has fallen to $39.4/PH/s/day, reaching a historic low, while most miners’ breakeven point remains at $40. Although the network hashrate exceeds 1 Zettahash, Q4 miner revenues have plummeted sharply, with unit costs rising to $137,800 per Bitcoin.

The financial performance of publicly listed mining companies best illustrates the problem—generally showing negative gross margins. To stem losses, some operators have begun slowing down, leading to an 8% decrease in total network hashrate. This is not just price volatility but a structural crisis: intense competition for hashrate, accelerated hardware depreciation, and high financing costs in a high-interest-rate environment—all hitting simultaneously.

Transition: Hashrate shifts toward AI and high-performance computing

It is in this desperate situation that miners have discovered their greatest hidden assets—large-scale power contracts, data center infrastructure, and cooling systems. These assets, once considered cost centers during the mining era, are now strategic high grounds amid the AI wave.

Early results of this transformation are already evident:

Core Scientific accounted for 21% of its Q3 revenue from HPC/AI; TeraWulf more aggressively redirected 14% of its power toward AI computing, even sacrificing mining capacity; Iris Energy, though only 3% of its revenue from AI, saw its stock price increase over 4 times this year, showing market support. The most aggressive, Bitfarms, announced plans to gradually exit Bitcoin mining by 2027, transforming its Washington state facilities into high-performance computing centers supporting NVIDIA GPUs. Cipher Mining has even more ambitious plans, aiming to expand capacity to 1.7GW by 2026, mainly serving AI computing businesses, and recently received an upgrade to “Overweight” by JPMorgan.

This is not simply “mining machines switching to AI,” but a strategic reassessment of infrastructure. Compared to Bitcoin’s volatile prices, AI data centers offer more stable, predictable cash flows through long-term contracts. Market valuations are also vastly different—data center operators often enjoy P/E ratios of 20-25, whereas traditional mining remains much more modest. Investment institutions have already sensed this shift; mining stocks are decoupling from Bitcoin trends and even rising against the market.

Green energy transition: Cost optimization and ESG win-win

Under the heavy burden of energy costs, renewable energy is no longer just an “environmentally friendly choice” but a “necessity for survival.” Operators are seeking the cheapest green power worldwide—Sangha Renewables launched a 20MW solar mining facility in Ector County, Texas; Phoenix Group introduced a 30MW hydroelectric operation in Ethiopia; Canaan and partners deployed wind power in Briscoe County, Texas, and are developing AI-optimized energy-efficient smart mining rigs.

Iceland, with its abundant geothermal resources, has long been a legendary destination for miners, forming part of the global green mining map alongside Texas and Canada. According to Cambridge research, by 2025, over 52.4% of Bitcoin mining energy will come from renewable sources, with wind and hydro accounting for 42.6%, nuclear 9.8%, a significant increase from 2022.

This energy structure shift not only reduces costs (electricity accounts for the largest share of mining expenses) but also responds to regulatory and investor ESG demands. Avoiding a repeat of Tether’s closure of facilities due to soaring energy prices in Uruguay has become a shared lesson for industry players.

Outlook: Transformation as a winning strategy

Industry analysis indicates that US-listed miners are losing market share due to international competition, and heavily indebted operators face bleak prospects. However, those successfully transforming—Iris Energy, Cipher Mining, CleanSpark, and others—are gaining favor from Wall Street institutions, with upward revisions of their stock price targets.

Market forecasts suggest that by 2026, the AI/HPC transition rate could reach 35%, with the derivative industry potential scaling to hundreds of billions of dollars. The core of this industry transformation is testing who can reallocate excess hashrate and energy advantages into the most promising future growth areas.

In short, the Bitcoin mining industry is undergoing a brutal self-revolution. The ultimate winners will no longer be just mining operators but those who successfully pivot into AI infrastructure providers and master low-cost green energy supply through cross-industry evolution.