Bitcoin Miners Turn to AI as Compute Returns Beat Mining

Bitcoin miners are facing tighter margins as AI infrastructure begins to offer more attractive returns, even as the U.S. continues to expand its share of the global Bitcoin network’s computing power, according to CoinShares.

CoinShares’ Q1 2026 Bitcoin Mining Report said Bitcoin mining hash price dropped to around $29-$30 per petahash per second per day in early 2026, compared with approximately $36-$38 in Q4 2025. The report estimates that AI infrastructure could account for as much as 70% of revenue for listed miners by the end of 2026, compared with about 30% currently.

Publicly traded miners also faced elevated production costs. CoinShares estimated that the weighted-average cash cost of producing one Bitcoin was approximately $79,995 during Q4 2025.

The growing pressure on miners is increasingly tied to how companies use limited electricity, data-center capacity and investment capital. According to CoinShares, AI infrastructure can generate returns that are both higher and more predictable than Bitcoin mining while hash prices remain close to cyclical lows.

For miners that already have access to large-scale power and data-center infrastructure, shifting some resources toward high-performance computing can therefore make economic sense.

The move toward AI does not mean U.S. Bitcoin mining is broadly disappearing. CoinShares reported that the U.S. share of the global hash rate increased by about two percentage points quarter over quarter.

Instead, the industry appears to be developing a hybrid model. Some publicly listed miners are increasing their AI and HPC operations while continuing to mine Bitcoin, which remains a significant but increasingly pressured source of revenue.

Why AI is attracting Bitcoin miners

AI is increasingly competing with Bitcoin mining for electricity, rack capacity and data-center resources. That competition could eventually push Bitcoin mining toward power sources that are less expensive and more flexible.

Listed mining companies have announced more than $70 billion in combined AI and high-performance computing contracts. The infrastructure economics also show a major difference between the two businesses. Bitcoin mining infrastructure typically costs about $700,000 to $1 million per megawatt, while AI infrastructure can require approximately $8 million to $15 million per megawatt.

Several major miners demonstrate how quickly the sector is changing.

Core Scientific has approximately 350 megawatts energized for HPC, with around 200 megawatts currently billed. Its agreement with CoreWeave was expanded to $10.2 billion over 12 years.

TeraWulf has 39 megawatts of critical IT capacity operating at its Lake Mariner facility and has $12.8 billion in contracted HPC revenue.

IREN has expanded its fleet to more than 10,900 Nvidia GPUs, while Hut 8 agreed to a $7 billion, 15-year Fluidstack lease covering 245 megawatts at its River Bend campus.

AI and HPC still represent a relatively early stage of the miners’ diversification strategies, but their contribution to revenue is increasing. CoinShares said AI/HPC colocation generated 39% of Core Scientific’s Q4 revenue and accounted for 27% of TeraWulf’s revenue.

IREN’s AI Cloud division contributed 9%, while HIVE’s HPC operations represented 5% of revenue.

The transition is taking different forms across the industry. CoinShares identified IREN and Bitfarms as companies shifting toward HPC while treating Bitcoin mining as a bridge during the transition.

CleanSpark remains more focused on Bitcoin mining in the near term while gradually expanding its AI exposure. Marathon has taken another approach, deploying smaller containerized facilities of around 10 megawatts that can work with intermittent power supplies.

That flexibility matters because Bitcoin mining can be temporarily interrupted, while AI workloads generally require much more consistent uptime.

Mining margins remain under pressure

CoinShares described Q4 2025 as the most difficult quarter for Bitcoin miners since the April 2024 halving. The combination of a sharp decline in Bitcoin’s price, a near-record network hash rate and three straight negative difficulty adjustments compressed mining economics.

The three consecutive downward difficulty adjustments represented the first such streak since July 2022.

The pressure continued into Q1 2026. Hash price briefly dropped to around $28 per PH/s per day in late February before recovering into the $30-$35 range.

CoinShares expects more high-cost miners could capitulate during the first half of 2026 if Bitcoin fails to recover. Older or mid-generation mining equipment requires electricity prices below 5 cents per kilowatt-hour to remain profitable, while newer machines operating below 15 J/TH generally maintain stronger margins at typical industrial electricity rates.

The growing presence of AI operations also creates another complication: determining the true cost of Bitcoin production for companies running hybrid businesses.

AI and HPC expansions can distort per-Bitcoin cost calculations because expenses such as debt, depreciation and overhead associated with AI infrastructure may be allocated across a smaller Bitcoin output. As a result, the financial picture increasingly combines two very different businesses: cryptocurrency mining and data-center operations.

Core Scientific’s failed merger with CoreWeave illustrates the complexity. Shareholders rejected the deal on Oct. 30, 2025. CoinShares also noted that Core Scientific later restated its financial statements after assets scheduled to be demolished as part of its HPC conversion had been incorrectly capitalized.

Bitcoin price remains crucial

CoinShares said a sustained recovery in hash price above $40 per PH/s per day would likely require Bitcoin to climb toward $100,000 by the end of 2026, while price growth would also need to outpace continued increases in network hash rate.

If Bitcoin remains below $80,000 for the rest of the year, hash price could decline further if mining difficulty continues rising. However, additional shutdowns by unprofitable miners could reduce the network’s hash rate and help limit further deterioration.

CoinShares views the long-term durability of the AI shift as uncertain. Bitcoin mining remains highly dependent on the cryptocurrency’s price, meaning a substantial recovery in mining profitability could prompt some companies to reconsider how much capital they dedicate to Bitcoin mining versus AI and HPC infrastructure.

For now, CoinShares characterizes the shift primarily as a response to differences in expected returns rather than proof of a permanent departure from Bitcoin mining.

Miners with access to flexible electricity contracts and inexpensive, intermittent power could retain an advantage, particularly when their facilities are not designed to support the continuous power and uptime requirements of AI workloads.

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