Public Bitcoin miners report historic losses as production costs exceed Bitcoin prices, with a significant shift towards AI ventures.
In a historic downturn, publicly traded Bitcoin miners collectively reported losses as their production costs exceeded Bitcoin prices for the first time in Q2 2026, according to research from CoinShares.
The average cost for mining a single Bitcoin soared to about $75,500, while the price of Bitcoin at the end of the quarter stood at approximately $58,400, highlighting a significant gap of nearly $17,000 or 29%.
Declining Hash Price and Revenue Challenges
The hash price, a vital metric for miner profitability, plummeted to a record low of $27.7 per PH/s per day in June 2026, a stark contrast to its peak of around $63 per PH/s in July 2025. This decline was compounded by miners facing a mere 1% share in commission revenues and ongoing high mining difficulty levels. However, by September, Bitcoin's price rebounded to about $77,000, leading many miners back to profitability, as noted by CoinShares.
Additionally, the network hash rate witnessed a 27% decline from its October 2025 peak of over 1 ZH/s, while Bitcoin mining difficulty remained elevated, further straining the industry's economic landscape. The Bitcoin price at the close of Q2 was less than half of its all-time high of $126,080.
“Although these fluctuations may appear concerning, they remain consistent with historical patterns,” analysts commented.
According to CoinShares, the hash rate typically follows historical cycles linked to halvings, and the current downturn does not surpass the maximum six-month decline of about 50% seen in 2021 due to the mining ban in China. Experts attribute the recent decline primarily to soaring electricity costs in Texas.
Miners Pivot to AI Ventures
CoinShares highlighted an increasing trend among miners to diversify into artificial intelligence (AI). For instance, Core Scientific opted to pay Block $41.9 million to terminate a contract for 15 EH/s of mining equipment and confirmed it would halt its mining activities to focus solely on AI colocation services. Other companies have made similar moves:
- Keel (formerly Bitfarms) ceased operations in the U.S. on June 29;
- IREN plans to exit by the end of 2026;
- Cipher Digital intends to withdraw from the sector by the end of 2027.
AI Transition Appears Inevitable
The stark difference in profitability between Bitcoin mining and AI infrastructure is driving this shift. CoinShares estimates that AI operations yield about $1.5 million in profit per MW, compared to approximately $500,000 for Bitcoin mining, indicating a clear economic incentive. Many miners have already committed to long-term contracts with AI clients, lasting up to 15 years, and are unlikely to return to cryptocurrency mining even with price recoveries.
Potential Recovery on the Horizon
Post-Q2, conditions have improved slightly, with rising Bitcoin prices allowing most companies to break even in their mining operations. Analysts believe that Bitcoin prices will remain the dominant factor affecting mining economics, with the U.S., China, and Russia controlling about 68% of the network's hash power, particularly as the U.S. strengthens its position. Emerging markets like Paraguay, Ethiopia, and Oman are also making their mark in the mining landscape.
Nonetheless, the shift towards AI is considered irreversible. Public miners that have reallocated their energy resources and infrastructure to support AI workloads are expected to continue in this domain. CoinShares predicts that future investments in cryptocurrency mining will primarily come from adaptable players like Riot, MARA, HIVE, and Bitdeer, who remain open to both sectors. Notably, Hut 8 introduced a modular infrastructure model in March, enabling flexible transitions between AI tasks and Bitcoin mining.
