Miner's Great Migration

Compiling: Plain Language Blockchain

Core Scientific (NASDAQ: CORZ) announced today that it expects to sell all 2,500 of its Bitcoin holdings in Q1 2026. The company had already cashed out 1,900 BTC in January, at an average price of about $92,000 per coin, netting $175 million.

These funds are being reinvested into more mining machines, rather than into the company’s AI computing expansion. This is part of its broader transformation strategy—Core Scientific has signed over $10 billion in AI hosting contracts and is gradually scaling back its Bitcoin mining operations.

Core Scientific is not an exception; it’s a bellwether.

Signs of Transformation

Across the U.S., at least 9 publicly traded Bitcoin mining companies have announced plans to shift partially or entirely toward AI and high-performance computing (HPC). The list includes sectors of industrial-scale mining: Riot Platforms, Bitfarms, TeraWulf, IREN, CleanSpark, Hut 8, Bit Digital, Marathon, and Cipher Mining.

The numbers are staggering. According to CoinShares research, these companies have announced over $43 billion in AI and HPC contracts in recent months. Hut 8 alone signed a $7 billion, 15-year lease supported by Google; TeraWulf secured a $6.7 billion contract with similar large-scale cloud providers. Riot Platforms, which once claimed to build the “world’s largest Bitcoin mine” in Corsicana, Texas, is now converting two-thirds of its capacity into AI workload centers.

The scale of this shift is so profound that Ben Gagnon of Bitfarms bluntly states: “Bitcoin mining remains profitable. The problem is, the value created by HPC is many times higher, and it’s predictable for years to come. The company can no longer justify continued investment in Bitcoin mining.”

Why Now?

The April 2024 halving cut blockchain rewards in half—an event that occurs roughly every four years. This time, the network’s hash rate (computing power) has grown exponentially, making the situation painful. Even with Bitcoin prices hovering around $100,000, the increasing competition among machines for fewer Bitcoins has crushed profit margins.

CoinShares predicts that by the end of 2025, only a few large public miners will remain profitable at current price levels. Bitcoin then fell back to around $85,000 (a sharp 30% drop from 2025), turning this squeeze into a survival crisis.

Meanwhile, AI companies are desperately hungry for data center capacity. Training cutting-edge models requires enormous electricity, specialized cooling, and reliable infrastructure—precisely what Bitcoin miners have been building. Although machines differ (replaced by GPUs instead of ASICs), the building shells are compatible.

“Bitcoin mining provides a blueprint for AI compute booms and modern data centers,” Meltem Demirors, a partner at Crucible Capital, told Wired. “They’ve realized that diving into AI narratives reduces capital costs. They already have powered factories; they just need to remove the mining hardware, and tenants can bring their own GPUs.”

Positioning of Hyperscalers

A new financial mechanism makes this transformation more fundable: Hyperscaler Backstops—large-scale cloud service stability. When miners sign leasing agreements for AI infrastructure, tech giants like Google or Microsoft support the payments. This turns active mining companies overnight into creditworthy landlords, enabling loan-to-value ratios (LTV) of up to 85%.

It’s a clever strategy. Miners gain stable, long-term income; hyperscalers, which take 5-7 years to build their own substations, get access to powered infrastructure; Wall Street firms underwrite the deals. JPMorgan and Goldman Sachs are already involved.

What Does This Mean?

Optimistic view: Bitcoin miners have finally found their product-market fit. Their true asset has always been electricity infrastructure, not just minting digital currency. AI makes this point clearer and more tangible.

Pessimistic view: The Bitcoin mining industry is hollowing out. If the economic model only works when not actually mining, something is off. The security model of the Bitcoin network relies on miners’ deep participation (the “skins in the game”), not on them becoming landlords for AI companies.

For now, the trend continues. CoinShares estimates that by 2026, mining revenue could drop from 85% to below 20% of total industry revenue. Miners are abandoning Bitcoin but are clearly hedging risks.

As CleanSpark notes: at current hash prices, the return on investment in AI infrastructure makes Bitcoin mining look insignificant.

This is not a celebration but a eulogy for an era.

Article link: https://www.hellobtc.com/kp/du/03/6244.html

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