Bitcoin: BTC Mining Profitability Plummets, Accelerating the Shift to AI

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Sep 9, 2026Rémy Rencurel

An Unprecedented Drop in Bitcoin Mining Difficulty

The mining difficulty of the Bitcoin network had reached a historic peak of nearly 156 T (trillions) at the end of October 2025, before beginning a continuous decline. As of September 1, 2026, this difficulty has even dropped to around 125.8 T, after ten consecutive months of decline (see graph below).

Such a sequence is almost unprecedented in the history of the BTC network. The difficulty had only experienced a comparable annual drop in 2021, when China attempted to ban Bitcoin mining.

During this current drop in difficulty, the price of Bitcoin fell from a high of around $126,000 in October 2025 to nearly $58,500 by the end of June 2026. However, in recent weeks, the price of BTC has rebounded to around $79,000 at the time of writing.

The mining difficulty on the Bitcoin blockchain has generally decreased throughout the year. (Hashrate Index)

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More BTC Mined for the Same Hashrate, but Less Revenue Anyway

The results of the second quarter of 2026 for crypto-mining companies are very telling. Indeed, MARA mined 3% more than a year earlier, but its revenue dropped by 27%. Riot produced 11% more BTC for a mining revenue decrease of 19%, according to a recent report from Four Pillars analysts.

It must be said that the << hashprice >> (the daily revenue per PH/s of hashrate) hit a low of $28.30 last June, and it remained below the profitability threshold for many operators for more than two months (see graph below).

The hashprice for Bitcoin miners has faced tough times since October 2025. (Blockchain.com via Four Pillars)

The worst part is that costs for crypto miners are increasing, as the production cost per BTC at Riot, excluding depreciation, reaches $49,912, which is about 70% of the average selling price of $71,667. A year earlier, this ratio was only 50%. And including the depreciation of mining machines (ASICs) and infrastructure, it becomes catastrophic, as the production cost climbs to $90,631, which means mining at a loss!

The production cost of bitcoins is becoming problematic for some miners.

The Shift to AI Accelerates with This Loss of Mining Profitability

To finance their transformation, publicly traded miners sold more than 32,000 BTC in the first quarter of 2026, the largest quarterly sale in their history, according to the Four Pillars report. This cash finances acquisitions of power plants, long-term leases for AI data centers, or complete pivots to the cloud.

Examples of BTC miners pivoting towards AI are multiplying at a rapid pace. TeraWulf has signed a 20-year lease with Anthropic for approximately $19 billion. Cipher has entered into a $5.5 billion contract with AWS over 15 years. Riot announced an agreement of about $9.1 billion with a leading AI lab.

The most radical case is that of Keel Infrastructure, formerly Bitfarms. By the second quarter of 2026, the company dismantled all its mining operations in the United States, changed its name, and announced its intention to sell all of its remaining 1,861 BTC by the end of the year. The company is currently negotiating with tenants at three sites to repurpose its infrastructure, but no leases have been signed yet. This complete shift illustrates how far the break between mining and AI hosting can go.
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A Crypto Market Rebound That Is Not Enough for Now

The August rally in Bitcoin prices highlighted a revealing stock divergence among miners. Between August 17 and 28, while Bitcoin gained 21%, MARA and Bitdeer each rose by 10%, and American Bitcoin by 8%, while IREN dropped by 21%, Cipher and Core Scientific by 18%, and TeraWulf by 13%.

In summary, only companies still focused on mining saw their stocks rise. Those that have completed or significantly advanced their transition to AI have declined. The recent rebound in BTC has helped those who remained loyal to it, pushing the hashprice up by over 40% since its low in June 2026, now settling just below $40.

Moreover, for the first time in over a decade, the hashrate is no longer following the rise in BTC prices. It must be said that the equipment and electricity already allocated to AI do not return to crypto mining. This structural break resembles the first "bear market" of the hashrate, as recently mentioned by Twenty One Capital.

👉 On the same topic -- Bitcoin: the hashrate enters its first "bear market" against AI, according to Twenty One Capital

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The 2028 Halving: The Next Challenge for Miners' Economic Equation

This current degradation is compounded by a deadline programmed into Bitcoin's code. In 2028, the block reward will again be halved due to the halving phenomenon (it will drop from 3.125 to 1.5625 BTC), mechanically reducing the miners' main source of income.

Transaction fees, which are supposed to eventually take over from the block reward, remain marginal. For example, in a week in mid-August 2026, they accounted for only 22 BTC out of 3,178 BTC in block rewards distributed, barely 0.69% of the latter.

The 2028 halving could thus render a good portion of BTC miners unprofitable if the cryptocurrency's price does not rise significantly by then. In any case, all these elements reinforce the rationale for the pivot towards AI, where cost and revenue predictability is better.

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Source: Four Pillars
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Rémy Rencurel53 articles
Intrigued by Bitcoin and blockchain technology since 2013, I have professionalized in the sector by becoming, since 2018, a specialized writer in crypto news. I have followed the crypto sphere through its cycles, from amateur mining in the early days to the gradual structuring of the sector. Now independent, I cover crypto news, financial markets, and regulation.