Bitcoin’s mining industry is facing significant challenges as the hash price—essentially the revenue per unit of computational power—dips towards $40 per petahash per second (PH/s). Presently, this figure hovers around $42, having decreased from over $62 since July.

This downturn forces many mining operations, already grappling with narrow profit margins, to contemplate shutting their rigs. The supply chain isn’t immune either; hardware suppliers are reducing their orders in response to miners’ economic struggles and experiencing a decline in sales denominated in Bitcoin following a recent market crash.

Hash price plummets and nears a critical level. Source:

To cope with the low demand for mining equipment, companies like Bitdeer are diversifying into self-mining.

Due to the tightening profit margins, escalating capital expenses for hardware upgrades, and surging energy prices, many miners are pivoting towards AI applications, aiming to tap into alternative revenue streams as Bitcoin mining becomes increasingly competitive.

Miners Turn to AI Amid Rising Hashrate

Bitcoin miners are set to have their rewards halved every four years during the Bitcoin halving event, which adds complexity to an already challenging mining landscape. The network’s hashrate has recently surpassed 1 zetahash per second (ZH/s).

Initially, miners could earn 50 BTC for each block mined back in 2009, often using standard CPUs. However, following the April 2024 halving, this reward has dropped to 3.125 BTC, necessitating specialized ASIC hardware for effective mining today.

The evolving economics are compelling miners to pursue businesses related to AI data centers, resulting in billions in revenues. Recently, Cipher Mining secured a $5.5 billion deal with Amazon for compute services, while IREN signed a $9.7 billion agreement with Microsoft for GPU computing services.