Bitcoin miners' life-and-death dilemma: Mining is dead, transitioning for survival

Bitcoin miners are facing the most severe industry test in history. Currently, BTC prices hover around $93,000, which on the surface doesn’t seem like a collapse, but miners’ days are running out.

The brutal truth behind the numbers

Hash price has fallen to $39.4/PH/s/day, nearly hitting the $40 death line for most miners. In other words, if the coin price doesn’t rise and hash rate doesn’t decrease, small and medium-sized mining companies will operate at a loss. Q4 data is even more painful—publicly listed mining companies are generally showing negative gross profit, with an average cost of mining one Bitcoin reaching $137,800, but the current market conditions can’t support this cost at all.

Some miners have already begun taking desperate measures: reducing machine frequency to save electricity. This seemingly harmless move has led to an 8% decrease in total network hash rate. What does this indicate? It shows that the crisis has spread from individual companies to the entire industry.

Why is this time especially bad?

A simple drop in coin price isn’t the biggest problem. The real killer is the stacking of three blows:

First, hash rate competition has become fierce. More and more new miners are entering, causing difficulty to keep rising, and the advantage of older miners is being continuously diluted. Second, depreciation of mining equipment is skyrocketing. Previous generation devices are rapidly losing value, while new equipment costs haven’t decreased. Lastly, financing costs remain high in a high-interest-rate environment—expanding capacity requires loans, but high interest makes it hard to breathe.

Escape Route ①: Shift to AI and high-performance computing

Smart miners are already seeking ways out, and the first path is to “turn to AI.”

This move may seem aggressive, but it is actually a natural advantage for miners. Decades of accumulated large-scale data centers, stable power contracts, and advanced cooling systems—these are golden assets for building AI infrastructure. As a result, leading mining companies are signing long-term contracts with tech giants like Google and Microsoft, expecting to generate billions of dollars in stable cash flow.

The most radical case is Bitfarms: they plan to completely exit Bitcoin mining by 2027 and convert all facilities into high-performance computing centers supporting NVIDIA GPUs. This is not a test; it’s a definitive decision.

Even more radical is TeraWulf—they have already prioritized shifting electricity to AI computing and are even willing to sacrifice some mining capacity. Core Scientific is more pragmatic; in Q3, HPC/AI revenue accounted for 21%, and they are building a “dual-engine” business model combining mining and AI.

What surprises most is investor reaction. Iris Energy (IREN) has only 3% of its business in AI, yet its stock price has quadrupled this year—market focus has completely shifted. Cipher Mining also received a “buy” rating from JPMorgan, mainly due to its 2.5GW AI expansion plan.

Why is the market so optimistic about AI computing power? Because compared to Bitcoin’s volatility, AI service contracts are more stable in the long term, with more predictable cash flows, and their valuations are worlds apart—data center operators often achieve P/E ratios of 20-25, while traditional miners have already fallen into ruins.

Escape Route ②: Embrace the renewable energy revolution

Another viable path is “green upgrading.” Faced with high energy costs, miners are increasingly turning to wind, hydro, and solar power.

Texas, Iceland, Canada have become new hubs. Sangha Renewables launched a 20MW solar project in Texas, Phoenix Group invested in 30MW hydroelectric operations in Ethiopia, and Canaan partnered with Soluna to deploy wind power facilities and develop energy-efficient mining equipment.

Data speaks volumes: according to the latest research from Cambridge, by 2025, 52.4% of global Bitcoin mining energy will come from renewable sources (wind/hydro accounting for 42.6%, nuclear 9.8%), a significant increase from 2022. This is not just environmental showmanship but a real cost strategy—electricity costs are the biggest expense in mining, and low electricity prices mean hope for survival.

Moreover, this approach can also address regulatory and ESG investor demands. Just like Tether’s forced shutdown of local facilities due to rising energy prices in Uruguay, forward-looking miners are already ahead of the curve.

Who will survive?

The industry has entered the most intense elimination race. Wolfie Zhao, analyst at TheMinerMag, admits that US-listed miners are shrinking their market share due to overseas competition, and heavily indebted operators face a “grim” outlook.

But winners who successfully transform are emerging—companies like Iris Energy, Cipher Mining, and CleanSpark are favored by JPMorgan and Needham, with target prices continuously raised. The entire industry is expected to see a 35% HPC conversion rate by 2026, with market potential reaching hundreds of billions of dollars.

The conclusion

This is not only a life-and-death crisis for Bitcoin miners but also a window into the evolution of the crypto industry. Miners who can successfully convert their advantages in power and infrastructure into AI-era competitiveness will become true winners. Those clinging to traditional methods and lacking capital are likely already seeing the endgame. The transformation of miners is becoming an important indicator of the maturity of the Bitcoin ecosystem.