Life-and-Death Transformation in Bitcoin Mining: 70% of Leading Mining Companies Shift from "Mining Coins" to "Mining Computing Power," Hundreds of Billions in Capital Flow into AI

In November 2025, the Bitcoin mining industry faced an unprecedented profitability crisis. The network-wide hashprice fell below $35 per Petahash, while production costs rose to $44.8, resulting in payback periods for mining rigs generally exceeding 1,200 days. In this existential crisis, the industry underwent dramatic changes: 70% of leading publicly listed mining companies were already generating revenue from artificial intelligence infrastructure, with the sector raising over $6.6 billion in funding and signing GPU procurement contracts worth $15.5 billion. Meanwhile, miners led by Marathon Digital (MARA) were accumulating Bitcoin against the market trend, with holdings valued at as much as $5.6 billion. This marks Bitcoin mining’s shift from a pure energy consumer to a comprehensive high-performance computing service provider.

Profitability at Its Lowest: Industry Pain Under Hashrate Competition and Cost Pressure

For Bitcoin miners, the autumn of 2025 is especially harsh. The deterioration of two key metrics has pushed the entire industry to the brink: First, the core indicator of mining revenue—the hashprice—dropped below the psychological threshold of $35 per Petahash; at the same time, the average production cost rose to $44.8 per Petahash. This means that for most miners, every kilowatt-hour spent on mining is generating a book loss. The direct result: static payback periods for mining rigs have been stretched to a staggering 1,200 days or more, virtually invalidating investment return models.

The roots of this crisis are multifaceted. On one hand, network-wide hashrate hit a record 1.1 ZettaHash/s in October, with intense competition diluting returns per unit of hashrate. On the other, Bitcoin prices fell to around $81,000 in November, further squeezing miners’ incomes. Marathon Digital (MARA) CEO Fred Thiel issued a dire warning: if the current trend continues, after the next Bitcoin halving in 2028 (when block rewards drop to about 1.5 BTC), the vast majority of existing mining business models will collapse. Only those with access to extremely cheap energy, or those who successfully pivot to other computing businesses (such as AI), will survive.

This profit squeeze is triggering a chain reaction. Even for companies that have started pivoting to AI, revenue from AI businesses currently cannot fully offset the cliff-like drop in Bitcoin mining income. The financing environment has also worsened, with traditional debt and equity financing channels narrowing amid uncertain core business prospects. The entire sector is being forced, under enormous cash flow pressure, to make urgent strategic decisions about survival—whether to continue to go “all in” on Bitcoin, to pivot completely, or to find a path of integration?

Accelerating the AI Pivot: From “Power-Guzzlers” to “Computation Pillars”

Facing mounting difficulties in their core mining business, a historic “AI compute migration” is taking place at mining farms worldwide. Data shows that among the top ten publicly listed mining companies, seven have started generating substantial revenue from AI hosting or computing services. More attractively, the per-megawatt yield of AI hosting is now about 50% higher than that of traditional Bitcoin mining. This isn’t just adding a sideline—it’s fundamentally reshaping the industry’s value assessment system.

The determination and scale of this pivot are remarkable. Bitfarms was the first to announce the most aggressive plan: it will exit Bitcoin mining entirely within two years and fully convert its Washington State data center into a high-performance computing center, aiming for completion by December 2026. CEO Ben Gagnon bluntly stated that the potential returns of this AI data center may surpass all of the company’s historical mining revenue combined. This signals that some miners no longer regard Bitcoin mining as core, but instead as a launchpad into higher-value computing services.

The scale of partnerships is equally impressive. Iris Energy (IREN) signed a five-year, $9.7 billion GPU cloud computing agreement with Microsoft, including a 20% prepayment. The company plans to deploy Nvidia’s latest GB300 GPUs at its Texas facility starting in 2026. Another giant, Hut 8, sold off four Canadian natural gas power plants totaling 310 MW to streamline assets and focus on a dual-track strategy of “Bitcoin mining + high-performance computing.” CleanSpark has openly stated its goal to become an integrated computing platform serving both AI and Bitcoin mining. Transformation has shifted from being an option to a matter of survival.

Capital and Regulation: Billion-Dollar Restructuring and Global Policy Polarization

Backing this massive transition is a torrent of capital operations. A financing wave centered on “convertible notes” has swept the mining sector. CleanSpark completed $1.15 billion in zero-coupon financing, and TeraWulf issued $1.025 billion in zero-interest convertible bonds. Cipher Mining issued $1.4 billion in senior secured notes at a 7.125% interest rate. Iris Energy and Bitfarms have also planned or completed multi-billion-dollar bond issuances. These low-cost, long-term funds provide miners with precious “ammunition” for their transformation.

At the same time, miners’ hardware investments resemble an “arms race.” Iris Energy signed a $5.8 billion deal with Dell to procure Nvidia GB300 GPUs. Cipher Mining expanded its agreement with Fluidstack and obtained a $1.73 billion payment guarantee from Google. Even mining machine manufacturer Canaan received a $72 million strategic investment from BlackRock Digital Assets, Galaxy Digital, and others to develop high-performance computing and energy infrastructure. These massive contracts and investments indicate that traditional capital views pivoting miners as key vehicles for entering the AI compute race.

While capital markets heat up, global regulatory environments are becoming sharply polarized. In Malaysia, authorities have shut down about 14,000 illegal mining farms in the past five years, with losses to the state power company totaling $1.1 billion, prompting the government to form a task force to intensify crackdowns in November. Russia is using AI technology to counter illegal mining, embedding AI analytics in smart meters to detect abnormal electricity use. Meanwhile, Japan launched its first government-linked public utility-backed mining project to balance grid loads. Belarusian President Lukashenko even declared crypto mining a national electricity usage priority and a way to reduce reliance on the US dollar. This “East encourages, West restricts” pattern is reshaping the global geographic distribution of computing power.

Counter-Cycle Accumulation: Miners’ Long-Term Belief as “Strategic Reserve Holders”

Despite tight cash flows and business model transitions, one striking phenomenon is that leading public miners are not selling off large amounts of Bitcoin to cover operations. Instead, they are accumulating more, signaling strong long-term conviction in the asset’s value. Marathon Digital (MARA), as the industry leader, holds 53,250 BTC worth about $5.6 billion at current prices, making it the world’s second-largest publicly disclosed Bitcoin holder.

Key Bitcoin Mining Data and Transformation Trends, November 2025

Industry Profitability Indicators

Hashprice: below $35 / Petahash

Average production cost: $44.8 / Petahash

Mining rig payback period: over 1,200 days

AI Transformation Scale

Share of top miners involved in AI: 70% (seven of the top ten)

Total industry financing: over $660 million

Total GPU procurement/partnership contract value: over $1.55 billion

Representative partnership: IREN’s five-year, $9.7 billion deal with Microsoft

Major Miners’ Bitcoin Holdings (as of end of November)

Marathon Digital: 53,250 BTC (about $5.6 billion)

CleanSpark: 13,054 BTC

Canoo: 6,412 BTC

Bitdeer: 2,233 BTC

Canaan: 1,610 BTC + 3,950 ETH

Other miners are following closely. CleanSpark reported holding 13,054 BTC as of November 30, having mined 587 BTC that month. Canoo holds 6,412 BTC and has pledged long-term holding. Bitdeer increased its total reserves to 2,233 BTC after mining 511 in October. Even Canaan, which is pivoting aggressively to AI, holds a record 1,610 BTC and 3,950 ETH. This collective “reluctance to sell” provides key supply-side support to the secondary Bitcoin market during an exceptionally difficult period for the industry.

Behind miners’ accumulation strategies lies a shrewd long-term game plan. First, they are betting that Bitcoin’s long-term value growth will far exceed current operational difficulties, making holding assets more attractive than liquidating them. Second, by holding large amounts of Bitcoin, miners further align their interests with the Bitcoin network, strengthening the positive correlation between their market value and BTC price—which could also attract investors seeking Bitcoin exposure. Finally, during industry shakeouts, miners with larger “ammunition” (Bitcoin reserves) have greater M&A and risk resistance capabilities, positioning them as likely winners to emerge from the downturn and capture greater market share.