Bitcoin mining company escapes again for the Nth time

Author: Zhou, ChainCatcher

Since the end of last year, publicly listed mining companies have kicked off a new wave of collective share sales.

In February, Cango sold about 60% of its holdings—4,451 bitcoins. In January, Bitdeer liquidated all its bitcoin inventory. In the first quarter, Riot Platforms sold 3,778 BTC. Core Scientific had also previously planned to sell roughly 2,500 bitcoins in the first quarter.

Recently, leading miner MARA disclosed in an announcement that within just three weeks—from March 4 to March 25—the company sold 15,133 bitcoins and raised more than $1 billion in cash. At the same time, the company announced layoffs of about 15% of its employees, as part of a strategic shift toward energy and digital infrastructure companies.

In fact, selling bitcoins by miners is not new. During the bear markets of 2018 and 2022, mining companies also went through large-scale sell-offs and capitulation; afterwards, it was the more efficient players that remained. Only this time, what triggered the sell-off was not only the falling coin price—they also gained a new destination: AI data centers.

1. Three driving motives behind the sell-off

At face value, it looks like a coordinated dumping spree by mining firms. But if you break it down, their motives are not uniform. Broadly speaking, they can be divided into three types of selling logic.

Mining itself has fallen into losses

The first—also the most direct one—is cost pressure.

CoinShares’ latest mining report shows that the weighted average cash cost for listed mining firms to mine one BTC is about $79,995, while the BTC market price has been hovering between $68k and $70k. On average, that means a loss of nearly $19,000 per coin, with the industry overall sitting at roughly a 21% loss.

This is no longer a matter of profit margins shrinking; it’s a question of whether cash flow can hold up if they keep mining.

The report also shows that the computing power price once fell to $28 to $30 per PH per day in early March, hitting a historical low after the halving. At this level, for most operating mining rigs to maintain cash profitability, electricity prices basically need to be pushed below $0.05 per kWh. Currently, about 15% to 20% of the rigs across the network are at the edge of breaking even.

Meanwhile, heightened geopolitical tensions in the Middle East are driving up energy prices, and power costs remain under sustained pressure—an external variable that mining firms themselves can’t control.

In its report, QCP Group pointed out that when the bitcoin price is significantly below the average mining cost, mining firms face intense pressure, and liquidity priority is higher than the strategy of holding coins.

Against this backdrop, for some mining companies, selling bitcoins is a realistic need to keep operations running.

AI offers a more stable revenue model

The second motive is more strategic—and also the most worth digging into in this round of sell-off.

An analysis by Bloomberg suggests that, unlike past sell-offs made to cover costs, the funds from this sell-off are being reallocated to the field of artificial intelligence.

The business logic behind this is straightforward: mining revenue is highly dependent on coin prices, network difficulty, and electricity prices, making it extremely volatile. In contrast, AI infrastructure is closer to long-term leases. CoinShares’ report notes that its profit margins can reach 80% to 90%, and revenue is long-term and predictable.

More critically, mining firms already have readily available resources in hand—cheap power supply contracts, built data centers, mature cooling systems, and experienced operations teams.

Some analysts point out that the build cost for bitcoin mining infrastructure is about $0.7 million to $1 million per MW, while AI infrastructure can be as high as $8 million to $15 million per MW. This huge cost gap is being monetized by mining firms at scale.

It’s also worth noting that behind this transformation are some unexpected drivers—technology giants and traditional financial institutions.

Previously, Google provided credit backing for the lease obligations of its AI cloud platform Fluidstack. The disclosed credit support it has provided has already exceeded $5 billion. It has backed and underwritten AI transitions for miners such as TeraWulf, Cipher Mining, and Hut 8, and in return received corresponding equity. Microsoft signed a five-year, $9.7 billion AI cloud service contract with miner IREN. Morgan Stanley provided a $500 million loan to Core Scientific, with a potential total amount reaching $1 billion.

Their entry provides mining firms with capital backing that is far more solid than anyone might have imagined.

At the same time, Core Scientific, TeraWulf, Hut 8, Cipher, and other miners have signed large AI/HPC contracts in succession, with cumulative amounts already exceeding $70 billion. CoinShares’ report mentions that for miners with AI/HPC contracts, their valuation multiples are about twice those of pure-play mining companies. The market is rewarding companies that complete the transition first with a valuation premium.

Even miners with the strongest finances and the lowest leverage, such as HIVE, have voluntarily scaled back their mining business and moved toward expanding AI data centers. This shows that transformation pressure is no longer an exclusive situation for highly leveraged miners; it’s a directional choice the entire industry is facing.

Proactively using BTC as a financial tool

The third logic is relatively shrewd and offers the most initiative.

Some mining companies choose to sell BTC not out of operational pressure, but by using it as a tool to optimize their balance sheet—such as MARA. The specific approach is: use the proceeds from selling BTC to repurchase previously issued convertible bonds at a discount to their face value. This both reduces the size of liabilities and lowers the risk of potential equity dilution.

For these miners, BTC’s role on the balance sheet has quietly shifted—from a long-term holding that symbolizes belief to a strategic asset that can be allocated flexibly.

In addition, this round of sell-offs also saw a rarer category of sellers: sovereign states.

On-chain data shows that the BTC holdings of the Bhutan royal family government have fallen by about 66% from their peak at the end of 2024. In March, the size of single transfers has risen to between $35 million and $45 million, and the pace of selling has continued to accelerate.

Unlike most countries that accumulate BTC through market purchases, Bhutan’s holdings come from its domestic hydropower mining business. This large-scale de-risking may be related to funding needs for its national-level development projects. This is also one of the largest government bitcoin sell-off actions on record.

With the three logics overlapping—mining losses, AI transformation, and debt optimization—plus sell pressure at the sovereign level, the market is absorbing structural supply pressures from multiple directions with different natures. Miners’ bitcoin “faith” is being reshaped by more realistic business logic.

2. After exiting, everyone heads their own way

Of course, selling doesn’t mean fully clearing out. The remaining holdings and subsequent strategies of each mining company are showing clear divergence.

Three paths, three choices

The first path is to double down on mining.

Represented by CleanSpark and HIVE. They don’t follow the AI transformation narrative, don’t stack new debt, and instead rely on a combination of low electricity prices, next-generation mining rigs, and low leverage to try to win as the industry clears out. Their logic is that once high-cost capacity exits one after another, the unit economics—returns per unit of computing—of surviving miners will rise accordingly.

CleanSpark has previously stated publicly that at the current computing power price level, continuing to make large-scale investments in bitcoin mining is “not economically very reasonable,” but the company still chose to stick with its core business, betting that the cycle will eventually reverse.

A well-known crypto KOL, Blue Fox, noted that historically, nearly every time after halving, miners capitulate, and those that remain are often the more efficient players, who then capture a larger share in the next rebound.

For this type of miner, sticking with mining isn’t stubbornness—it’s trust in the规律 of cycles.

The second path is to walk on two legs.

Represented by MARA, IREN, and Riot. They retain a substantial BTC holding while simultaneously building out AI/HPC, offsetting the cyclical volatility of mining income with relatively stable income from AI operations.

In essence, these companies are answering an asset allocation question. The answer differs from company to company, but the core logic is that the two business lines support each other, spreading the risk of relying on a single source.

The third path is a full shift to AI.

Represented by Core Scientific, TeraWulf, and Cipher. Their BTC holdings have exited the position of core assets, and mining is gradually becoming an ancillary part of the data center business.

CoinShares expects that by the end of 2026, the share of AI revenue for some miners could reach as high as 70%, while the share of mining revenue could fall from roughly 85% at the start of 2025 to below 20%. On paper, these companies are still miners; in reality, they are becoming AI infrastructure operators that start from mining.

The potential risk of this path is that a heavy-asset transformation means a massive debt burden. If AI demand cools down, both ends of the business will come under pressure.

There are also views pointing out that Google’s credit guarantee structure via Fluidstack actually creates a highly concentrated counterparty risk: the entire cash-flow chain depends on Fluidstack as an intermediary. If there’s a major change in the AI lease market, this structure would become a single point of failure.

BTC price determines their fates

No matter which path they choose, they all ultimately point to the same variable: where the price of BTC goes.

CoinShares provides three scenarios:

● If BTC rebounds to $100k by the end of 2026, the computing power price would rise to about $37 per PH per day. Mining profits would recover, and overall industry pressure would ease;

● If it stays below $80k, high-cost miners will accelerate clearing out, and the traditional model of mining firms holding coins in anticipation of a bull market will become harder and harder to sustain;

● If BTC breaks through its all-time high, the computing power price could spike to $59 per PH per day, and the industry would enter a new expansion cycle.

Conclusion

Overall, mining companies face only two endgames: either the coin price rebounds, they return to their core business, and everything happening now is nothing more than a periodic historical footnote; or the price remains weak for a prolonged period, more and more miners complete the identity transition to AI data centers, and the “mining to hold coins while waiting for a bull market” business model becomes increasingly rare in this industry.

However, there’s another question worth asking beyond the business logic of this transformation. Mining companies are not ordinary publicly listed firms—the continuous investment in computing power is, by itself, a security budget for the Bitcoin network.

Sazmining CEO Kent Halliburton said plainly that these companies “hold power contracts, land, and infrastructure, yet hand these resources over to Microsoft and Google in exchange for rent checks—turning what used to be protecting the Bitcoin network into storing rack space for hyper-scale cloud service providers.”

When mining no longer produces sufficient economic returns, the rational business decision is naturally to shift resources. But if this trend continues to spread, who will bear the long-term cost of maintaining the security of the Bitcoin network will become an issue that can’t be ignored.

History may have provided an answer to this question.

The Bitcoin network has gone through several large-scale miner clear-outs, and after each one, it has continued operating with higher efficiency.

But this time, the miners who left weren’t just shutting down machines.

The times have changed.