In March 2026, the Bitcoin mining industry is experiencing an unprecedented "identity crisis". Once "coin miners" who wholeheartedly focused on Bitcoin mining and safeguarding the Bitcoin network have now collectively "changed their hearts" and turned to AI one after another — mining one Bitcoin costs a loss of about $19,000. Such a desperate situation has forced the entire industry to launch a survival-oriented transformation, evolving from "Bitcoin miners" to "data center operators in mining clothing".

This transformation is not an accidental attempt, but an inevitable choice for the entire industry when pushed to the wall, and it is also the most thorough "self-reinvention" since its birth. The latest mining report released by CoinShares reveals the industry’s "survival scar": the weighted average cost for listed mining companies to mine one Bitcoin has soared to about $80,000, while the current price of Bitcoin hovers between $68,000 and $70,000 — meaning that for each additional coin mined, the loss increases by about $19,000. No company can bear such a loss situation for a long time.

Just like a diligent practitioner who works hard but ends up in a predicament of making ends meet, the Bitcoin mining industry has finally realized that clinging to the old path of "coin mining" will only lead to extinction. Thus, a vigorous "transformation movement" has quietly kicked off — the entire industry has collectively "defected" to the field of AI infrastructure, signing more than $70 billion in AI and High-Performance Computing (HPC) contracts, frantically selling their Bitcoin to raise transformation funds, and even taking on huge debts, just to seize this "lifeline".

The once "obsession with coin mining" has now been smoothed by reality. One by one, listed mining companies have let go of their original intention of "focusing on coin mining" and started to frantically "dump" Bitcoin: so far, they have collectively sold more than 15,000 Bitcoin. Core Scientific sold about 1,900 Bitcoin (worth $175 million) in January and even plans to liquidate almost all remaining holdings by the first quarter of 2026; Bitdeer completely cleared its Bitcoin inventory in February; Riot Platforms also sold 1,818 Bitcoin (worth $162 million) in December last year.

Even Marathon, which holds 53,822 Bitcoin and can be called the industry’s "coin hoarding giant", has quietly loosened its stance — in its annual report on March 10, it expanded its coin sales policy, authorizing the sale of all Bitcoin reserves on its balance sheet. The pressure behind this is obvious: its $350 million Bitcoin-collateralized loan facility has seen the loan-to-value (LTV) ratio soar to 87% as the price fell to $68,000, facing the risk of default at any time. Selling Bitcoin has become the most direct and helpless choice for them to raise transformation funds.

In addition to "selling coins to survive", taking on debts for transformation is also a helpless move for mining companies, and the debt burden of the entire industry has soared to an unprecedented height. IREN now carries $3.7 billion in convertible notes across five series; TeraWulf’s total debt is as high as $5.7 billion, including convertible bonds and priority guaranteed notes from its hash power subsidiaries; Cipher Digital issued $1.7 billion in priority guaranteed notes in November last year, leading to its quarterly interest expenses skyrocketing from $3.2 million in the first nine months to $33.4 million in just the fourth quarter.

This heavy debt is no longer a burden that "coin mining" can bear — they are betting that the AI business can rise rapidly, generate sufficient revenue, and cover this huge debt. Just like an entrepreneur who bets all their assets for transformation, Bitcoin mining companies are using a big gamble to gain the possibility of survival.

The core reason why they are willing to take on huge debts and sell core assets to transform into AI is only one: AI can bring more stable and higher returns, and it is the only way out of the current loss predicament. From an economic perspective, the cost of Bitcoin mining infrastructure is about $7-10 million per megawatt, while AI infrastructure is about $8-15 million per megawatt. Although the initial investment is higher, AI can bring a profit margin of more than 85% with multi-year stable revenue expectations.

In contrast, Bitcoin mining is no longer as glorious as before. After the halving in early March, the hash price — a measure of a miner’s revenue per unit of hash power — hit a historic low of around $28-30 per PH/day. At this level, miners using older-generation machines need an electricity price below $0.05/kWh to barely achieve cash profitability — a threshold that most miners cannot reach. On one side is the continuously loss-making and bleak prospect of coin mining business, and on the other side is the profitable and promising AI business. Choosing the latter has become an inevitable choice for all rational practitioners.

This collective "defection" is completely changing the "identity" of the Bitcoin mining industry. More and more mining companies are no longer centered on "coin mining", but are more like "data center operators who part-time mine Bitcoin" — their focus has long been shifted to the construction and operation of AI infrastructure. It is predicted that by the end of 2026, the AI revenue share of some mining companies could reach as high as 70%, up from the current approximately 30%.

Core Scientific has taken the lead in transformation, with its AI hosting revenue accounting for 39% of its total revenue; TeraWulf is closely following with a ratio of 27%; IREN is currently at 9% but is expanding rapidly, planning to increase its liquid-cooled GPU hash capacity to 200 megawatts. They are no longer just "coin miners", but are gradually transforming into "infrastructure service providers" in the AI era, completing a thorough transformation from "mining" to "computing power services".

However, this transformation has left a thought-provoking "paradox": the mining companies responsible for safeguarding the security of the Bitcoin network are precisely the ones selling Bitcoin and pulling out. When coin mining is unprofitable and AI is very profitable, the rational economic choice is inevitably to shift funds away from the mining business — but if more and more miners do this, the security budget of the Bitcoin network will continue to shrink, and network security will face severe challenges.

Hash rate data has given the most intuitive signal. After peaking at around 1,160 EH/s in early October 2025, the network’s hash rate has dropped to around 920 EH/s, experiencing three consecutive negative difficulty adjustments — the first since July 2022, which is enough to show the impact of mining companies’ "capital withdrawal" on the network. The former "comrades-in-arms" who jointly guarded the Bitcoin network have now turned around and left one after another, leaving only an increasingly fragile network to bear the cost of transformation alone.

The market has already understood the signal of this transformation and given distinct valuation feedback. Mining companies with signed HPC contracts are currently trading at 12.3 times the next 12 months’ revenue; pure mining companies are only at 5.9 times. The market is paying more than a two-fold premium for AI exposure, which further strengthens the mining companies’ determination to transform — since transformation can bring higher valuation and recognition, why not?

At the same time, the geographical pattern of Bitcoin mining is also quietly changing. Currently, the United States, China, and Russia control about 68% of the global hash rate, and the United States increased its market share by about 2 percentage points in the fourth quarter of 2025 alone. But emerging markets are also accelerating their entry: Paraguay and Ethiopia have entered the top ten global mining countries, driven by HIVE’s 300 MW and Bitdeer’s 40 MW facilities, respectively, becoming "new forces" in the wave of mining transformation.

For the future of the Bitcoin network, CoinShares has given two distinct forecasts: if Bitcoin returns to $100,000 by the end of 2026, the network hash rate will reach 1.8 ZH/s by the end of 2026 and rise to 2 ZH/s by the end of March 2027, mining profitability will rebound, and the pace of AI transformation of mining companies will slow down; but if the Bitcoin price remains below $80,000, the hash price will continue to fall, the hash rate will further decline, and more miners will choose to exit; if it stays below $70,000 for a long time, it may trigger a large-scale "capitulation event" — ironically, this will benefit the surviving miners because the mining difficulty will decrease accordingly.

Next-generation mining machines may provide a "way out" for some miners. Bitmain’s S23 series and Bitdeer’s in-house SEALMINERA3 have an energy efficiency of less than 10 joules/TH, with mass shipments expected in the first half of 2026. Compared with the current mainstream mid-generation models, these new devices are expected to roughly halve the energy cost per Bitcoin. However, deploying new mining machines requires a lot of funds, and most miners now have their funds invested in AI transformation, making it impossible to take both into account.

Looking back at this wave of transformation, the "identity transformation" of the Bitcoin mining industry is sigh-worthy. This industry, which once centered on "guarding the Bitcoin network and hoarding Bitcoin", is now bidding farewell to the past with a new posture — they are no longer just "coin miners", but have become "transformers who build AI data centers and sell Bitcoin to save themselves".

Is this transformation merely a "stopgap measure" to cope with the current loss predicament, or a "permanent structural shift" related to the industry’s future? The answer may lie in the price trend of Bitcoin. If Bitcoin can return to a high level and mining profitability rebounds, some miners may choose to "turn back"; but if the price remains sluggish, this transformation will accelerate, and the industry that has focused on mining for the past decade will eventually evolve into an entirely new existence — an industry centered on AI infrastructure that occasionally part-time mines Bitcoin.

From "surviving by mining coins" to "breaking through with AI", the struggle and transformation of the Bitcoin mining industry are not only an inevitable result of industry development, but also a microcosm of the tide of the times. Between profit and persistence, they chose the former, but no one knows whether this "defection" will eventually lead them to a new life or into another unknown predicament.