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AI Devours Bitcoin Mining Hashrate—This Might Be the Biggest Bearish Signal for Bitcoin

As April has just begun, a piece of news in the crypto world has been overlooked: Bitcoin’s hash rate has declined for the first time in six years during the first quarter, dropping about 4%. Previously, Bitcoin’s hash rate had achieved double-digit growth for five consecutive years. There are two reasons behind this change: first, falling prices have turned mining from profitable to unprofitable, forcing miners to shut down; second, amid a significant increase in AI computing demand, many mining companies are abandoning mining to support AI industry computing power. This could potentially become a major bearish factor for Bitcoin.

👉 Miner Survival—Mining Losses, AI “Blood Profits”?

“Mining one Bitcoin costs me $10,000, and not mining is even more costly”—this may be the current situation for many miners. Data from Q2 2025 shows that the average cash cost to produce one Bitcoin by publicly listed miners has soared to about $74,600, while the current price is only $67,000. In stark contrast to rising costs, Bitcoin block rewards continue to decrease, and transaction fees remain sluggish. In recent months, due to poor market conditions, transaction activity has declined, with fees accounting for less than 1% of the total block reward, severely eroding miners’ main income source.

On the other side, the highly squeezed profits and even losses are compounded by debt from rapid expansion in previous years driven by blind leverage. Under the dual pressures of losses and debt repayment, many mining companies have been forced to pivot.

Additionally, the high concentration of hash power poses a threat to Bitcoin’s security architecture. Over 95% of Bitcoin blocks are produced by just six mining pools. This highly centralized hash distribution not only threatens the network’s decentralization but also makes large miners more vulnerable to regulatory pressure, further accelerating industry efforts to find alternatives.

Meanwhile, unlike the struggling mining industry, the rapidly growing AI sector is thriving. Global AI computing giants like NVIDIA are projected to generate $215.938 billion in revenue in 2025, with a net profit of $120.067 billion. Industry analysis shows that shifting to high-performance computing and AI data center services yields profit margins roughly three times higher than traditional Bitcoin mining. The stark difference in survival environments prompts miners to seek change proactively.

👉 Transition and Diversification—Sell Bitcoin, Focus on AI

Mining companies shifting toward AI computing power have caused significant turbulence in the Bitcoin market, primarily reflected in price volatility. To fund their transition, many miners are selling off their Bitcoin holdings. The total Bitcoin reserves of listed miners have decreased by over 15,000 BTC from their peak. Core Scientific sold about 1,900 BTC worth $175 million in January 2026 and plans to liquidate nearly all remaining holdings in Q1. Bitdeer, under “Bitcoin guru” Wu Jihan, cleared its reserves in February and announced a full transition to AI computing services. Since late 2025, Bitcoin prices have been falling steadily, once dropping below $70,000. This decline has further fueled investor panic, creating a vicious cycle of “selling—price drop—more panic selling.”

On the other hand, there are opportunities amid the chaos. Some miners leverage their existing power resources and infrastructure to successfully pivot into AI computing service providers. Core Scientific and CoreWeave have signed a 12-year, $10.2 billion partnership, with AI hosting revenue accounting for 39% of total income; TeraWulf has secured HPC contracts worth $12.8 billion. These transitions have diversified their businesses, reduced dependence on the Bitcoin market, and opened new profit streams.

Of course, shifting to AI computing isn’t easy. While miners already have infrastructure like power, land, and cooling, their hardware—Bitcoin miners versus AI servers—are incompatible. Significant investment is needed for equipment upgrades and technological transformation. Moreover, AI computing services demand higher technical expertise, including AI model optimization and data center operations, posing a huge challenge for traditionally mining-focused companies. Construction costs for AI data centers can reach up to $20 million per megawatt, compared to only $700,000–$1 million per megawatt for Bitcoin mining facilities. This nearly 30-fold capital difference means only well-funded miners can successfully make the switch.

👉 Negative Impact on Bitcoin—Reemergence of 51% Attacks?

A 51% attack, a term likely unfamiliar to many newcomers since 2020, refers to an attacker controlling over 50% of the network’s hash power or voting rights, enabling manipulation of transaction records. This attack mainly threatens proof-of-work (PoW) blockchains, undermining decentralization and security. Theoretically, the lower the total hash rate, the easier it is for an attacker to control over 51%. In 2014, the mining pool GHash.io briefly controlled about 42–49% of the network hash rate, raising community concerns about 51% attacks, which caused Bitcoin’s price to drop over 20% temporarily. Currently, the difficulty of executing a 51% attack on Bitcoin is high. Renting 51% of the network’s hash power for 24 hours costs about $24 million, and a week-long attack could cost over $6 billion. Additionally, such an attack could cause Bitcoin’s price to plummet, making double-spending profits unprofitable.

Furthermore, as mentioned earlier, miners liquidating their holdings to transition into AI contribute significant selling pressure, creating a continuous cycle of “sell-off—price decline—more panic selling.”

👉 Opportunities in Crisis—Bitcoin Price Rise Could Be the Breakthrough

1. It’s undeniable that the large-scale shift of miners to AI and the prolonged bear market in Bitcoin are interconnected. However, the “long bear, short bull” cycle has been repeatedly validated by history. When a bull market returns, and prices rebound above $100,000, miners will return to a profitable, relaxed state. More believers will hold onto their coins without selling, breaking the “sell-off—price drop—more panic sell” death spiral. Those who persist will experience the satisfaction of “standing atop the peak, overlooking all mountains.”

2. Traditionally, miners and AI companies compete mainly over computing power, but they also share similar needs for electricity and infrastructure. Industry analysts point out that miners can operate in regions with idle energy or limited infrastructure, which are often unattractive for large-scale data centers. Miners are also the only group willing to “absorb negative prices,” reduce output on demand, and stabilize renewable energy sources—flexibility that AI data centers cannot easily replicate.

3. In the long run, this mass transformation driven by survival pressure will accelerate industry reshuffling. Some “believer” Bitcoin miners may seize this opportunity to buy abandoned mining equipment and resources, expanding capacity for the upcoming bull run. Less committed miners might also pivot into computing services based on their circumstances. Since AI competition is inevitable, it’s better to accelerate clearing out less viable assets now.

👉 Long-term Strategy—Bitcoin and AI Computing Power’s Coexistence

In the long run, shifting Bitcoin miners to AI computing is a reallocation of computing resources across different fields, driven by capital pursuit of profits. The high profitability and stable returns of the AI industry attract miners to transition, but this doesn’t mean Bitcoin is doomed.

As a decentralized digital currency, Bitcoin’s value lies not only in its payment function but also in its underlying blockchain technology and decentralization philosophy. As long as these core values remain, Bitcoin will have room to survive and develop. Moreover, as miners transition, the hash rate of the Bitcoin network may stabilize at a new equilibrium. Miners and investors who truly believe in Bitcoin’s value will continue to hold, maintaining the network’s basic operation.

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