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CoinShares has warned that the Bitcoin (BTC) mining industry is entering a new shakeout phase, with roughly 15% to 20% of global capacity likely operating below breakeven conditions as profitability remains squeezed despite a resilient network hashrate. The firm described the recent downturn not as a routine cyclical dip, but as the beginning of a structural reordering that may narrow the field to only the most efficient and well-capitalized operators.
In a recent report, CoinShares said the fourth quarter of 2025 marked the toughest environment for miners since the April 2024 halving, which cut the block subsidy and permanently reduced baseline revenue for the sector. Bitcoin fell about 31% from roughly $124,500 in October to around $86,000 by December, while the network’s hashrate stayed near peak levels—an unfavorable combination that tends to compress margins across the industry.
CoinShares estimated the weighted average cash cost for publicly listed miners climbed to $79,995 per BTC over the period. At the same time, ‘hashprice’—a key measure of mining revenue per unit of computing power—slid to $36–$38 per PH/s, before deteriorating further to $28–$30 per PH/s in the first quarter of 2026. The firm noted that at a hashprice of $30, operations running hardware at or below the Antminer S19 XP class and paying electricity rates above $0.06 per kWh would likely be underwater.
The report also highlighted three consecutive downward adjustments in mining difficulty toward the end of 2025—an unusual pattern last seen in July 2022. CoinShares characterized the sequence as a potential ‘capitulation signal,’ suggesting some miners are powering down machines and exiting the market as profitability weakens. Still, the firm stressed that the broader system has not experienced anything like the structural breakdown seen during China’s 2021 mining ban. Network hashrate has since rebounded to around 1,020 EH/s, pointing to persistent investment and continued competition for block rewards.
One of the report’s central themes was the widening dispersion in costs among mining companies. While some operators continue to benefit from low-cost power contracts and efficient fleet upgrades, CoinShares found that miners pursuing aggressive pivots into artificial intelligence (AI) and high-performance computing (HPC) have seen BTC-denominated cost metrics rise due to higher depreciation and interest expenses. In other words, the headline “cost to mine one BTC” can look worse not only because mining economics are challenging, but because balance sheets are being reshaped by data-center expansion.
CoinShares argued that the industry’s transformation is accelerating as miners increasingly behave like infrastructure providers rather than pure commodity producers. It estimated that AI and HPC revenue currently accounts for about 30% of sales among publicly listed miners, but could rise to as much as 70% by year-end if announced buildouts and capacity deployments proceed as planned. The firm noted that more than $70 billion in AI/HPC deals have already been announced, with some companies signing contracts extending beyond a decade—effectively repositioning themselves as long-term data-center operators.
The economic logic, CoinShares said, is straightforward: while hashprice tends to oscillate with Bitcoin’s price cycle and difficulty, AI infrastructure can offer structurally higher and more stable returns when backed by long-duration contracts. That dynamic is pushing management teams to prioritize predictability of cash flows, particularly when mining revenue is pressured and capital markets scrutinize leverage.
Looking ahead, CoinShares said a recovery in Bitcoin above $100,000 could provide a near-term lift to mining profitability, but it would not reverse the broader competitive reality. In the current environment, it argued, only operators combining ‘low-cost power,’ ‘latest-generation hardware,’ and a ‘stable capital structure’ are positioned to endure. The firm framed the ongoing adjustment as a narrowing of the viable set of competitors—an industry transition with implications not just for miners, but also for investors tracking how Bitcoin’s security budget and infrastructure ownership evolve over time.
🔎 Market Interpretation
- Mining shakeout risk: CoinShares expects a new consolidation phase, with ~15%–20% of global BTC mining capacity likely operating below breakeven, raising the odds of shutdowns, asset sales, or mergers.
- Price–hashrate mismatch: BTC’s ~31% drawdown (≈$124,500 to ≈$86,000) alongside near-peak hashrate created a “worst of both worlds” setup—revenues fall while competition stays intense, compressing margins.
- Post-halving structural pressure: The April 2024 halving permanently reduced subsidy revenue, meaning profitability now depends more heavily on efficiency, power costs, and balance-sheet resilience than prior cycles.
- Hashprice deterioration signals stress: Hashprice fell from ~$36–$38/PH/s to ~$28–$30/PH/s in early 2026, implying many mid-tier fleets cannot cover operating costs at common power rates.
- Capitulation clues but no systemic break: Three consecutive difficulty downward adjustments (rare; last similar pattern July 2022) suggest some miners are powering down, yet the network remains robust with hashrate rebounding near ~1,020 EH/s.
- Business-model bifurcation: Miners with cheap power and newer ASICs remain competitive, while firms pivoting into AI/HPC may show higher BTC-denominated “cost to mine” due to depreciation and interest—reflecting strategic retooling rather than pure inefficiency.
💡 Strategic Points
- Breakeven is increasingly hardware + power dependent: At ~$30/PH/s, fleets at/under Antminer S19 XP-class with electricity costs >$0.06/kWh are likely unprofitable, putting older gear and high-cost regions at risk.
- Difficulty relief may be temporary: Even if weaker miners exit, resilient capital and ongoing investment can keep hashrate competitive, limiting margin recovery for survivors.
- AI/HPC as a cash-flow hedge: AI/HPC revenue is ~30% of sales among listed miners and could reach ~70% if buildouts land—supporting more stable earnings compared with cyclic hashprice.
- Deal flow implies infrastructure repositioning: With $70B+ in announced AI/HPC deals and some 10+ year contracts, some miners are evolving into long-duration data-center operators rather than pure BTC commodity producers.
- Balance-sheet quality becomes a competitive weapon: In a low-hashprice regime, operators with low leverage, manageable interest costs, and capex discipline are more likely to endure than those reliant on refinancing.
- BTC price recovery helps, but doesn’t reset the field: A move back above $100,000 could lift profitability short-term, yet CoinShares emphasizes the long-run winners still need cheap power, latest-gen ASICs, and stable capital structures.
- Investor watchpoints: Track (1) hashprice vs. miner opex, (2) difficulty trend for capitulation evidence, (3) AI/HPC contract durability and counterparty risk, and (4) concentration/ownership of large-scale infrastructure affecting Bitcoin’s security budget dynamics.
📘 Glossary
- Hashrate: The total computing power securing the Bitcoin network (e.g., measured in EH/s). Higher hashrate generally means more competition for the same block rewards.
- Mining difficulty: A network-adjusted parameter that changes roughly every two weeks to keep block production near ~10 minutes. Downward adjustments can indicate miners are shutting off machines.
- Halving: A scheduled event that cuts the block subsidy in half (April 2024 reduced baseline miner revenue), increasing the importance of fees and operational efficiency.
- Hashprice: Miner revenue per unit of hashpower (often expressed as $/PH/s/day). It moves with BTC price, transaction fees, and network difficulty.
- PH/s and EH/s: Units of computing power—petahash per second (PH/s) and exahash per second (EH/s), where 1 EH/s = 1,000,000 PH/s.
- Breakeven (mining): The point at which mining revenue equals operating costs (primarily electricity) and, depending on methodology, may also incorporate depreciation and financing costs.
- ASIC (e.g., Antminer S19 XP): Specialized mining hardware; newer generations generally deliver better efficiency (more hashes per watt), lowering cost per BTC at a given power price.
- AI/HPC: Artificial Intelligence / High-Performance Computing workloads run in data centers, often supported by longer-term contracts that can stabilize cash flows versus mining.
- Capitulation (miners): A phase where unprofitable miners shut down en masse, sometimes reflected in difficulty declines and potential secondary-market selling of equipment.
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