Cheaper to mine, harder to profit – The new reality for Bitcoin miners!

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In a rather eventful State of the Union address, President Donald Trump decided to sprinkle a bit of “innovation policy” fairy dust, trying to make everyone feel better about trade restrictions while simultaneously convincing us that the economy is as resilient as an old rubber band. Meanwhile, Bitcoin, which had once seen the glory of a $69k price tag, decided it was time to give back a little, retracing 6% in under three days. Nice, right?

Of course, this drop in price has made things a little uncomfortable for the Bitcoin miners. Imagine mining Bitcoin and suddenly realizing your electricity bill is shrinking, much like the rapidly decreasing size of your profit margin. The so-called “electrical cost” of mining Bitcoin has dropped from a heart-stopping $71k in Q4 2025 to a much less exciting $53.5k now. Sure, it’s cheaper to mine Bitcoin, but hey, the miners who were inefficient have been ousted, leaving the remaining ones trying to figure out how to stay afloat without drowning in their own electricity bills.

AI and data centers are changing the Bitcoin mining scene

In August 2024, VanEck-probably sipping coffee from some very high-end mug-decided to publish a report that pointed out something miners seemed to be missing: the massive opportunity to jump on the AI and high-performance computing (HPC) gravy train. They even tossed around some numbers that made people blink twice-projecting an annual revenue of $9.11 million per megawatt (MW). It’s a little hard to ignore that kind of math, isn’t it?

Meanwhile, Bitcoin miners, who’ve been pulling in about $4.5 million per MW of installed capacity, are looking enviously at some data center stocks that are raking in a cool $30 million per MW. What do these miners do? They’ve got a plan: if they can redirect just 20% of their mining power to AI and HPC infrastructure, they could double their market capitalization by 2028. Not bad for a bit of rebranding.

But it’s not just about megawatts and GPUs. No, no-let’s throw in a bit of finance, shall we? The bond market has been handing out long-term senior notes like a high school prom queen handing out invitations. Bitcoin mining companies, riding the AI wave, issued $33 billion worth of them in the last 12 months. From the safety of 4% returns for the old energy titans to the 9.25% risk-heavy premiums for Bitcoin infrastructure firms like CoreWeave, it’s a carnival of financial opportunity.

As VanEck wisely noted, Bitcoin miners could use their already-established sites to host AI/HPC workloads in less than a year. They’d be sitting pretty with “growth credit,” while the energy giants are still trying to figure out where they left their reading glasses.

Bitcoin infrastructure giants are already making the leap

TeraWulf, a company that seems to be very good at adding “Wulf” to their name, showed in their Q4 and full-year results that they’ve already made the leap from Bitcoin miner to AI infrastructure player. They’ve even signed long-term lease agreements-60 MW with Core42 and 380 MW with FluidStack. Sounds like a great way to get paid while looking like you know what you’re doing!

Meanwhile, in the boardrooms of Marathon Digital, they’ve decided to get fancy and shift their focus beyond just Bitcoin. They’ve partnered up with Starwood Digital Ventures in a joint venture that will involve energy contributions, design, construction, and tenant sourcing. Oh, and they’re planning to convert their sites into full-blown data centers. All this, with the promise of more than 2.5 GW of IT capacity. Now that’s ambitious. Or maybe just another Tuesday for them.

The million-dollar question remains, of course: Will AI demand keep this show running smoothly? If it does, those premium capital prices will be justified, and the debt will just keep on paying for itself. But if the AI bubble bursts, well, let’s just say the high debt could quickly transform into a financial anchor that might pull down even the best-laid plans.

Final Summary

  • The fall in Bitcoin prices and the ever-increasing difficulty of mining have led to a dip in revenue for Bitcoin mining firms in Q4 2025.
  • This has made it more attractive-and possibly unavoidable-for large-scale miners to convert a portion of their capacity into AI/HPC data centers.

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2026-02-28 11:03