Introducing the morning briefing of US Crypto News — a key summary of the most significant events in the cryptocurrency industry for the upcoming day.
The Bitcoin mining sector is undergoing fundamental changes. The rapid rise in costs, the collapse of commission fees, and the expansion of artificial intelligence are forcing miners to reconsider their strategies, turning once-stable operations into a competitive arena for next-generation computing power.
AI is displacing mining against the backdrop of rising costs
The cryptocurrency mining sector has reached a critical transformation point. According to the CoinShares report for the fourth quarter of 2025, production costs have reached historical highs. At the same time, the profitability of equipment has decreased, and companies in the artificial intelligence (AI) field have begun actively repurchasing infrastructure from miners.
The industry has faced a new economic reality. The average direct cash costs of mining one Bitcoin for public companies have surged to about $74,600.
At the same time, the all-in costs, including depreciation and administrative expenses, have skyrocketed to $137,800.
Fundamental changes in the network economy
Transaction fees, which previously supported miners' revenue, fell below 1% of the block reward in May and June. This is the lowest figure since the halving in 2024.
Despite the drop in margins, the network's computing power (hashrate) continued to grow. In August, the figure first exceeded 1 zettahash per second (Zetta hash/s).
However, the structure of this growth has changed. Public mining companies provided only about 80 EH/s (exahash) of the total increase since the beginning of the year. The main expansion of capacities now comes from private operators, government entities, and energy companies that have access to ultra-cheap resources.
As a result, public companies are facing dilution of their market share due to rising hashrate that they no longer control.
Expansion of artificial intelligence
The main factor changing the landscape of the industry has been the competition for infrastructure. Industrial mining sites with capacities from 100 MW to 1 GW are ideally suited for hosting modern AI data centers. They have similar requirements for power supply, cooling systems, and equipment density.
This coincidence has turned mining sites into a primary object of interest for hyperscalers (the largest cloud service providers).
Deals between Google and TeraWulf, Google and Cipher, as well as multilateral agreements with Fluidstack indicate a unified development vector: tech giants are acquiring the capacities created by miners at a premium to the market.
The economic justification for this process is clear. Bitcoin mining yields about $1 million per megawatt, while computations for AI generate between $10 million and $20 million per megawatt.
Ignoring such a difference in profitability has become impossible.
Separation of business models
Currently, the sector is diversifying into two main models:
1. Large-scale miners → full or partial conversion for AI/HPC (high-performance computing) tasks.
These objects are capable of modernizing their electrical topology and reliability standards to meet corporate requirements. They enter into decade-long contracts and move from volatile block rewards to stable income based on the provision of capacities.
2. Low-cost, mobile miners → transition to using stranded energy.
Miners unable to compete with AI are moving beyond centralized networks: to flaring gas sites, remote hydropower stations, and sources of excess renewable energy. Portable installations are being deployed everywhere there is access to cheap energy, reminiscent of the early, decentralized stages of mining development.
This migration indicates a long-term reconfiguration of the industry, rather than a temporary cyclical phenomenon.
According to the CoinShares report:
The average hashprice during Q2 was around $50 per petahash per day, continuing to decline after the halving.
Amid rising difficulty, stagnant fees, and predominantly sideways price dynamics of Bitcoin, parks of outdated ASIC equipment were forced to cease operations.
Analysts predict that the price of hashrate will remain in the range of $37–55 per petahash per day until 2028, unless the increase in BTC value significantly outpaces the growth in hashrate.
Structural shift: AI is outpacing Bitcoin
For the first time in Bitcoin's history, miners are being displaced from their own infrastructure due to price pressure.
The superiority of the AI economic model, the flow of deals from hyperscalers, and rising costs of industrial mining are pushing the industry towards irreversible transformation.
The Bitcoin network remains resilient, hashrate continues to grow, but the mining business model is rapidly being rewritten.
This puts miners in a position to choose: either a large-scale transition to the AI field or a shift to remote sources of stranded energy.
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