The average cost to mine one bitcoin among publicly listed operators climbed to roughly $79,995 in the fourth quarter of 2025, according to a new report from digital asset investment firm CoinShares published March 26. With bitcoin trading near $86,000 in late December, many miners were operating on margins thin enough to be wiped out by a modest price correction. James Butterfill, CoinShares' head of research, called it "one of the most challenging periods for miners since the last halving," the April 2024 event that cut miners' block reward income in half.

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The Numbers Behind the Squeeze

Bitcoin's price fell from approximately $124,500 in October 2025 to around $86,000 by year-end, compressing margins at exactly the wrong time. Network hashrate (the total computing power pointed at the Bitcoin network) hit a record near one zettahash in 2025 before retreating to around 920 exahash per second in early 2026. Higher hashrate raises the network's mining difficulty, reducing the reward each miner earns per unit of computing power and increasing effective production costs even as prices fall.

Hashprice, a metric that tracks how much revenue miners earn per unit of computing power, dropped to $36 to $38 per petahash per day in Q4 2025, according to CoinShares. By early 2026 it had slid further to roughly $29, recovering only partially to around $32 to $33 at the time of writing, according to data from Hashrateindex.com.

CoinDesk reported on March 22 that miners were losing an estimated $19,000 on every bitcoin produced. The same report noted that the network had also recorded three consecutive negative difficulty adjustments, the first such streak since July 2022. The most recent adjustment was a drop of 7.76%, the second largest downward move of 2026 to date.

Negative difficulty adjustments are a recognised signal that miners are shutting off machines because operating them is no longer profitable.

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Selling Bitcoin, Buying Into AI

Rather than simply cutting capacity, a large share of listed miners is redirecting assets toward artificial intelligence and high-performance computing infrastructure. Miners hold three things that hyperscalers such as Google, Microsoft, and Amazon urgently need: large power connections, physical land, and cooling systems. CoinShares estimates that listed miners have collectively announced more than $70 billion in AI and HPC-related contracts.

The economics are driving the shift. AI and HPC infrastructure can generate operating margins of 80 to 90 percent, compared with the near-zero margins many miners are currently experiencing. Mining revenue accounted for roughly 85 percent of these companies' total revenue in early 2025. Butterfill projects that some listed miners could generate as much as 70 percent of their revenue from AI by the end of 2026, with mining potentially accounting for less than 20 percent for the companies deepest into the transition.

The deals are already in motion. Core Scientific had energised roughly 350 megawatts for cloud computing company CoreWeave by the end of 2025, targeting 590 MW by early 2027, and has said it will sell substantially all of its bitcoin holdings in 2026 to fund that buildout. MARA Holdings announced plans to convert its US mining facilities into AI-ready campuses and liquidated more than $400 million in bitcoin to help finance a one-gigawatt joint venture with Starwood Capital Group. Hut 8 signed a $7 billion, 15-year lease with FluidStack in Louisiana, a deal backed in part by Google. Riot Platforms sold 1,818 BTC in December 2025 for $161.6 million and activated a 10-year data centre lease with AMD in January 2026.

The financial strain is visible in earnings reports. MARA reported a net loss of $1.7 billion for Q4 2025, compared with a $528 million profit in the same quarter the prior year, driven largely by a $1.5 billion mark-to-market loss on digital asset holdings. For context, MARA's full-year 2025 revenue was $907.1 million, up 38 percent year-on-year.

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What It Means Outside the United States

The same structural logic playing out on Wall Street (cheap power combined with high-margin compute demand) is emerging independently in parts of Africa and South Asia.

Pakistan's government allocated 2,000 megawatts of surplus electricity from underutilised coal-fired plants to bitcoin mining and AI data centres in May 2025. Those plants were running at just 15 percent of capacity, giving the government a strong incentive to find anchor power buyers who could monetise idle infrastructure. Pakistan is developing a regulatory framework for an estimated 15 to 20 million domestic crypto users. The country is not pivoting away from mining under pressure. It is positioning itself as a new-entry destination for mining and AI compute investment, targeting foreign capital, job creation, and economic stabilisation.

In the Democratic Republic of Congo, a project run by Virunga Energies demonstrated a related model: using bitcoin mining as a reliable power buyer to lift a hydroelectric plant's utilisation rate from 5 percent to 50 percent. The improved economics allowed household electricity prices to fall from $0.35 per kilowatt-hour to $0.15. That case is part of a broader documented pattern. The Mission 300 initiative, a joint effort by the World Bank and the African Development Bank to electrify 300 million Africans by 2030, has identified projects deploying decentralised AI compute on African mini-grids that generate five to ten times more revenue per unit of energy than traditional household supply. Nigeria is also an active jurisdiction, with 3 megawatts of operational mining capacity and a 150-megawatt facility under construction. Ethiopia operates at roughly $0.053 per kWh from renewable sources, making it one of the most competitive mining jurisdictions globally.

India, the region's largest economy, has not made comparable policy moves, constrained by rising power costs and limited land availability.

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What Comes Next

CoinShares projects network hashrate could reach 1.8 zettahash by the end of 2026 and 2 zettahash by early 2027. If those projections hold, the network's computing capacity will continue expanding even through periods when many individual miners are operating at a loss.

The harder question is whether capital and GPU supply (NVIDIA's Blackwell chips remain sold out through mid-2026) flows primarily to well-capitalised Western operators or whether energy-rich markets in Africa and South Asia can secure a meaningful share of the buildout.

For miners still running pure-play operations, the threshold for survival is increasingly narrow, centering on a thinning cohort with genuinely competitive power costs below roughly $0.06 per kWh. A separate risk concerns the debt loads miners have taken on to finance their AI transitions. TeraWulf carries approximately $3.05 billion in long-term debt and Cipher holds $3.73 billion in senior secured notes. If bitcoin prices fall sharply or AI contract timelines slip, those debt structures could introduce systemic exposure across the sector.