AI Drives Shift Away from Crypto
By JL Zhang | 08 Jul, 2026

The lure of billions from powering AI data centers is driving a shift away from bitcoin mining and other power-intensive crypto investments.

For more than a decade, the bitcoin mining industry had a single, all-consuming purpose: convert cheap electricity into cryptocurrency. Companies raced to lock up power contracts, build warehouse-scale facilities packed with specialized chips, and accumulate bitcoin on their balance sheets. That era is ending — not because of regulation, environmental pressure, or a market crash, but because a far more lucrative customer showed up at the door.

Artificial intelligence companies, desperate for grid-connected power and data center capacity, are paying bitcoin miners sums that mining itself can no longer match. The result is one of the fastest industrial pivots in recent memory. According to a CoinShares analysis published in March 2026, more than $70 billion in cumulative AI and high-performance computing (HPC) contracts have now been announced across the publicly traded mining sector. Listed miners, which derived roughly 30 percent of their revenue from AI at the start of the year, are on track to generate as much as 70 percent of it from AI by the end of 2026.

In other words, within a single year, the public bitcoin mining industry will have transformed from a crypto business with an AI side hustle into an AI infrastructure business that still mines some bitcoin on the side.

The Math That Broke Mining

The pivot is not merely opportunistic — for many operators, it is a matter of survival. The economics of bitcoin mining have deteriorated sharply since the April 2024 "halving," which cut the block reward miners receive in half, to 3.125 BTC. Network difficulty kept climbing even as rewards shrank, and by early 2026, hashprice — the daily revenue a miner earns per unit of computing power — had fallen to record lows of roughly $34 to $35 per petahash per second.

Meanwhile, costs went the other way. Electricity typically accounts for 70 to 90 percent of a miner's operating expenses, and U.S. wholesale power prices were projected to average around $51 per megawatt-hour in 2026, driven in no small part by the very AI data center boom that miners are now joining. The collision of falling revenue and rising costs produced a brutal bottom line: the average public miner spent roughly $80,000 to produce a single bitcoin in early 2026, while bitcoin traded in the $68,000-to-$70,000 range — a loss of nearly $19,000 per coin mined, by one CoinDesk estimate.

When your core product costs more to make than it sells for, you either shut down or find a better use for your assets. Miners, it turns out, are sitting on exactly the assets AI companies need most: large-scale grid connections, industrial real estate, high-capacity electrical infrastructure, and sophisticated cooling systems. Hyperscalers like Microsoft, Google, Amazon, and Meta face chronic shortages of data center capacity and can wait years for new grid interconnections. Miners already solved that bottleneck — often without realizing how valuable the solution would become.

The Deals Reshaping the Industry

The scale of the contracts flowing into former mining companies helps quantify just how dramatic the shift is:

Core Scientific has become perhaps the most aggressive conversion story. Its expanded agreement with AI cloud provider CoreWeave is worth $10.2 billion over 12 years, and the company is converting 300 megawatts of bitcoin mining capacity at its Pecos, Texas campus into an AI data center campus, with plans to scale that single site toward roughly 1.5 gigawatts. AI colocation already accounts for 39 percent of Core Scientific's revenue, and analysts project HPC will reach 71 percent of its total revenue in 2026, up from just 5 percent in 2024. To fund the buildout, the company sold $175 million worth of bitcoin — 1,992 BTC — in March 2026 and pursued a $3.3 billion junk-bond offering. CEO Adam Sullivan has described the miner-to-AI conversion as one of the largest infrastructure shifts of the decade.

IREN (formerly Iris Energy) signed a landmark five-year deal with Microsoft projected to generate $1.94 billion in annualized revenue at an 85 percent project-level EBITDA margin, anchored by its 750-megawatt campus in Childress, Texas. The company already operates roughly 23,000 GPUs, has 810 megawatts operational with 2,100 megawatts under construction, and completed a $3 billion convertible notes offering in May 2026 — one of the largest capital raises ever by a public miner — to accelerate the transition. Analysts expect HPC to jump from 3 percent of IREN's revenue in 2024 to 71 percent in 2026, and the company is targeting $3.1 billion in annualized recurring revenue by year-end, with additional contracts from Together AI, Fireworks AI, and Fluidstack.

TeraWulf has amassed $12.8 billion in contracted HPC revenue, and AI leasing is now its primary revenue driver, projected to reach 70 percent of total revenue this year from essentially zero in 2024.

Hut 8 signed a $7 billion, 15-year lease for AI infrastructure at its River Bend campus in Louisiana.

Cipher Mining struck a multibillion-dollar agreement with Google-backed Fluidstack, with HPC expected to reach about 34 percent of its revenue.

Bitfarms went furthest of all: after posting a $46 million loss, the company announced it will completely wind down cryptocurrency mining over the next two years and pivot entirely to AI computing by 2027.

Even the holdouts are bending. Riot Platforms, which spent most of 2025 defending its position as a bitcoin mining pure-play, executed a late but substantial move into AI colocation, with HPC expected to account for 13 percent of its 2026 revenue. Marathon Digital, the largest public miner by hash rate, has been more cautious but has acquired AI-relevant facilities and announced exploratory partnerships.

Quantifying the Impact on Crypto

What does this exodus of capital, power, and attention mean for the crypto industry itself? Several measurable effects are already visible.

Miners are selling their bitcoin. Public mining companies liquidated more than 25,000 BTC in the first quarter of 2026 alone — repaying debt and funding data center construction rather than "hodling." Cango, a former automotive services firm turned miner, sold 4,451 BTC worth roughly $305 million in a single week. This reverses years of miner accumulation and adds persistent sell pressure to a market already down: bitcoin fell roughly 17 percent through the first months of 2026.

Network growth is slowing. Global hashrate — the total computing power securing the bitcoin network — actually fell 5.8 percent in the second quarter of 2026, to around 1,004 exahashes per second, as unprofitable machines were switched off and capital that would have bought next-generation mining rigs was redirected to GPUs. CoinShares pushed back its forecast for the network reaching 2 zettahashes by a month, and even its projection of 1.8 zettahashes by year-end assumes bitcoin recovers to $100,000. Next-generation hardware from Bitmain and Bitdeer could roughly halve energy costs per coin, but deploying it requires capital that many miners are now spending on AI instead.

Markets are rewarding the defectors. The clearest quantification comes from equity valuations. Miners with secured HPC contracts trade at 12.3 times next-twelve-month sales; pure-play miners trade at just 5.9 times. Investors are paying more than double for AI exposure. While bitcoin dropped 17 percent in early 2026, a basket of mining stocks rose more than 50 percent, with top performers up over 70 percent. JPMorgan revised its sector outlook to favor companies shifting toward AI. Every one of those signals tells the remaining miners to pivot faster.

A Structural Shift — With an Asterisk

None of this is entirely without risk for the pivoting companies. GPUs depreciate far faster than mining rigs as new chip generations arrive, running AI data centers demands a different operational skill set than tending ASIC farms, and hyperscaler-anchored deals create heavy customer concentration — IREN's dependence on a $1.9 billion Microsoft prepayment being a prime example.

And the crypto industry isn't disappearing so much as consolidating and relocating. The U.S., China, and Russia now control roughly 68 percent of global hashrate, while low-cost emerging markets like Paraguay and Ethiopia have entered the top ten mining countries. Whether the shift proves permanent hinges largely on one variable: bitcoin's price. A rally back to $100,000 would restore mining margins and slow the migration; a prolonged stay at $70,000 or below accelerates it.

But the deeper change may already be irreversible. The industry has learned that its most valuable asset was never the bitcoin it produced — it was the electricity it controlled. In an economy where AI demand from data centers could push power consumption past 1,000 terawatt-hours and, by one BlackRock estimate, eventually consume nearly a quarter of U.S. electricity, grid-connected megawatts are the scarcest commodity in tech. Bitcoin miners spent a decade accumulating them. AI is now simply the highest bidder.