The Shift from Bitcoin to AI: Miners Seeking New Opportunities

As the artificial intelligence (AI) revolution takes off, Bitcoin miners are finding new pathways to thrive amidst dwindling miner rewards.

Key Takeaways

The demand for AI computing resources has led some Bitcoin miners to shift their focus away from traditional BTC mining.
Companies like Iren, Applied Digital Corp, and Hut 8 Corp have transitioned their mining operations to support AI and saw significant increases in their stock prices.
Other miners, such as Bitfarms and Riot Platforms, are even selling their Bitcoin assets to invest in AI infrastructure.
The current mining environment is challenging, with rising costs and falling Bitcoin prices prompting miners to sell BTC to cover operations.
Future Bitcoin halving events may further cut miner rewards, potentially making Bitcoin mining less profitable compared to AI investments.
Concerns have been raised about Bitcoin's security, as reduced mining rewards can impact the network's stability.

Bitcoin miner

The Impact of AI on Bitcoin Mining

The recent surge in AI technology has presented Bitcoin miners with a lifeline as miner rewards lessen. Companies like Iren (Nasdaq: IREN), Applied Digital Corp (Nasdaq: APLD), and Hut 8 Corp (Nasdaq: HUT) have repurposed their mining equipment for AI tasks, reaping substantial share price increases in 2025.

Bitcoin miners
Source: Artemis

However, some miners are not just diversifying; they are abandoning Bitcoin and cryptocurrency mining entirely. For instance, Bitfarms (Nasdaq: BITF) recently sold its BTC mining plant in Paraguay to invest in its North American high-performance computing (HPC) and AI energy infrastructure for 2026. Riot Platforms (Nasdaq: RIOT), as another case, funded an AI deal with AMD by selling 1,080 BTC from its balance sheet. These sell-offs have added pressure on the price of Bitcoin.

Can AI's Growth Stunt Bitcoin?

The ongoing difficulties in the mining sector stem from rising operational costs that surpass the current Bitcoin [BTC] price. The Hash Ribbon indicator, which monitors miner capitulation, signaled trouble in late November. When miners are forced to sell BTC to maintain operations, it creates a cycle of selling pressure.

Bitcoin miner
Source: Glassnode

Historically, miner capitulation often hints at a bottom signal, potentially marking a good buying opportunity if the 30-day moving average (green line) crosses above the 60-day moving average (blue line). While this scenario seems imminent, any significant recovery in Bitcoin’s price could be jeopardized by miners’ transitions to AI.

Looking at the future, each Bitcoin halving event reduces the block rewards given to miners. After the last reduction in 2020, the rewards decreased to 6.25 BTC. Following the 2024 halving, these rewards will drop to 3.125 BTC, and by the upcoming 2028 halving, they will fall further to 1.5625 BTC. Unless Bitcoin's market value skyrockets, mining may become less profitable compared to potential AI returns.

Concerns About Bitcoin's Security

Transaction fees are designed to make up for diminishing block rewards, contributing to the security budget that keeps miners operational. Yet, as those rewards dwindle and transaction fees struggle to keep pace, experts like Justin Bons, founder of VC firm Cyber Capital, have sounded alarms about Bitcoin’s safety.

“BTC's security is lower now than it was five years ago! The security budget will keep falling until the network is attacked,” he warns.

Bitcoin miner
Source: Dune

Conclusion

The transition of Bitcoin miners towards AI-related ventures highlights the evolving landscape of the cryptocurrency industry. With rising costs, diminishing rewards, and potential impacts on network security, miners are navigating a challenging future. Understanding this shift is crucial for anyone following the developments in Bitcoin and its associated ecosystems.