As Bitcoin mining becomes increasingly challenging, daily revenues are dwindling, forcing miners to either accept slimmer margins or exit the market altogether.
On August 19, blockchain market research firm CryptoQuant released data revealing that the Hash Ribbons indicator—reflecting the difficulty and financial strain on Bitcoin miners—had a 30-day moving average as of August 11 that was higher than in the previous two months. According to CoinTelegraph, this unfavorable metric signals that miners’ profitability is likely to continue its downward trend.
Earlier, on August 1, Bitcoin’s mining difficulty hit an all-time high of 90.66 trillion. Although it dipped slightly to 86.8 trillion a few days later, this figure remains above the peak difficulty recorded earlier this year, which was 82.1 trillion.
The rising difficulty is eroding the profits of miners, which have already been significantly squeezed in recent times. Blocksbridge data from August 8 showed that Bitcoin mining profits have fallen to a record low, dropping below 36 petahashes per second (PH/s).
Since the fourth Bitcoin halving event in late April, miners’ income has plummeted, as indicated by their declining ability to maintain profitability. Over the past two months, daily mining revenues have decreased by 63% due to smaller rewards and rising transaction fees. Meanwhile, the need for upgrading mining rigs has left miners on the brink of “shutting down and walking away.”
“Total daily revenue for miners was $79 million in early March, but it’s now down to $29 million. Revenue from transaction fees also accounts for just 3.2% of daily earnings—the lowest since April 8,” stated a CryptoQuant report from early July.
In response to these challenges, some companies are pivoting their GPU systems—originally used for cryptocurrency mining—toward AI training and high-performance computing services. In July, Bitcoin mining company TeraWulf announced that it had diversified its operations, focusing on AI data centers.
According to data from JP Morgan, as of June 17, the total market capitalization of 14 major Bitcoin mining companies listed in the U.S. reached $22.8 billion, an increase of $4.4 billion in two weeks. However, these companies are now investing more in AI than in mining equipment. Bitcoin mining firm Bit Digital estimates that 27% of its revenue will come from AI through the leasing of Nvidia GPUs in Iceland, amounting to approximately $92 million annually.
Hut8, a cryptocurrency mining company based in Miami, has also raised $150 million to build an AI data center. “We have completed a commercial agreement related to AI using a GPU leasing model, including a deal with a client that involves a combination of fixed infrastructure payments and revenue sharing,” Asher Genoot, CEO of Hut8, told CNBC.
