As bitcoin mining economics “have gone from bad to worse,” companies pivot and sell to survive

Bitcoin is down roughly 50% from its all-time high in October, putting immense pressure on bitcoin mining companies. To survive, the firms are increasingly pivoting to AI and selling their assets, while others are exiting the business entirely.   

On Monday, Core Scientific announced in its earnings call that it sold over 1,900 bitcoin for $175 million in January.

CFO Jim Nygaard said that at this time, the company holds under 1,000 bitcoin and “expects to remain opportunistic going forward” as it shifts focus to AI and colocation growth.

CEO Adam Sullivan added that its mining business is “still essentially in runoff today.”

Core Scientific’s bitcoin sale follows former bitcoin miner Bitdeer’s similar move in late February, when the company announced it had sold all of its bitcoin holdings to fund its pivot to AI.

Haris Basit, chief strategy officer at Bitdeer, told Sherwood News that “unlike many others in the sector, we have mastered the most technically demanding part of bitcoin mining: designing and producing energy-efficient ASICs,” or application-specific integrated circuits.

Basit said that the company is evaluating multiple nonbinding powered land acquisition opportunities, as it is currently prioritizing liquidity to maintain flexibility.

“Going forward, the bitcoin we generate may be monetized or retained on a dynamic basis, depending on capital needs, market conditions, and the relative return on alternative growth initiatives,” Basit said.

Rosenblatt analyst Chris Brendler said in a note that in the two months since the firm’s previous sector update, bitcoin mining economics “have gone from bad to worse.”

“With hashprice now under 3¢, it is down to levels that are unprofitable for all but the most efficient operations, and we do not expect most miners to operate unprofitably for extended periods of time,” Brendler said.

Brendler told Sherwood that bitcoin’s price drop means miners have been squeezed, and the network hash rate hasn’t kept up. “It has happened before and usually takes six months before the market adjusts,” he added.

The most vulnerable miners are the ones with higher cost structures: as the companies went public, they grew operations, and the risks grew bigger too, Brendler said.

The miners in a better position are in places where energy prices are super low, mostly outside the US, he said.

“I don’t think bitcoin mining will be a big industry in the US long term,” Brendler predicted.

He added that as companies exit the mining business, it could create opportunities for others.

“Hut 8 spun off its mining business to American Bitcoin (ABTC). They have a low-cost structure and efficient operation so that it can be profitable down here, and with access to capital, they could be an acquirer,” he said, adding that they might not acquire whole companies but rather the locations or machines of firms exiting the space, like Cipher Mining or Terawulf.

Mark Palmer, equity research analyst at Benchmark, said that given the advantage Hut 8 stands to gain from its lower cost of capital after the spin-off, it would be surprising if other bitcoin miners with AI data center exposure did not pursue that option. 

“We have already seen Bitfarms walk away from its bitcoin mining business so it could focus on AI data centers as the rebranded Keel Infrastructure, and it is quite feasible that other miners will do so as well,” he said.

Even MARA Holdings, one of the largest corporate bitcoin miners and stockpilers, recently pivoted to high-performance computing (HPC) with its Starwood deal. Brendler said that while MARA is “late to the game,” the deal makes sense as it outsources HPC development to “an established leader in the data center sector.”

MARA said in a 10K filing that it had revised its digital asset management strategy in 2025 to permit the sale of bitcoin generated from operations, softening its former “HODL” stance.

“We expect to continue to monetize bitcoin opportunistically to enhance our financial flexibility, including to provide liquidity or to fund capital projects and other initiatives that we believe enhance long-term shareholder value,” according to the filing.

Juliet Ye, head of communications for Chinese miner Cango, which holds 3,645 bitcoin, told Sherwood that bitcoin’s current pullback is accelerating the industry’s evolution.

She said that operators are being pushed to think beyond pure hashrate growth and find how to diversify their infrastructure value — whether through energy optimization, active treasury management, or deploying their energy-secured compute assets toward emerging opportunities like AI inference.

“The miners who adapt their business models now, rather than waiting for the next bull cycle, will be the ones who define the industry landscape over the next five years,” she said.

In February, Cango completed the sale of 4,451 bitcoin on the open market. The move was “executed to strengthen its balance sheet and reduce financial leverage, which provides increased capacity to fund the Company’s strategic expansion into AI compute infrastructure,” a press release said. 

Looking ahead, Alexander S. Blume, founder and CEO of Two Prime, told Sherwood that there is still a core group of miners who remain focused on the space. 

“The hashrate occupied by these pivoting miners will fall into the hands of larger miners or private groups still committed to BTC. At current prices, only a few miners can make money,” Blume said.

Blume said that some groups have added finance desks that can hedge downside exposure and generate income on their holdings.

“I think we will see, ultimately, consolidation of mining hashrate into the hands of fewer players and fewer pools, which is not ideal for the decentralization of bitcoin itself,” he said.