According to Financial Times writer Bryce Elder, the Bitcoin mining sector, which has long been under pressure, may be shifting towards artificial intelligence (AI) infrastructure due to economic difficulties.
The shift of publicly traded mining companies, particularly those based in the US, towards data center operations could be a critical turning point for the future of the industry.
According to the author, the fundamental problem with Bitcoin mining is structural: a system that ultimately results in zero net. As more capacity is added to the network, competition increases, margins narrow, and the base of costs is based on energy prices.
MARA Holdings CEO Fred Thiel stated in November that the daily block reward for miners would drop from 450 $BTC to 225 $BTC after the next halving in 2028, indicating that the math in the sector was becoming increasingly difficult. According to Thiel, unless Bitcoin shows annual growth of 50% or more, the period after 2028 and 2032 will become even tighter for miners.
Furthermore, while transaction fees were expected to replace block subsidies, this transition has not yet occurred. On-chain transaction volume remains limited, and open positions in derivatives markets have fallen to approximately $50 billion.
A notable development has recently occurred on the Bitcoin network. Network difficulty has dropped by approximately 11%, marking the largest decrease since the Chinese ban in 2021. This suggests that some miners have shut down their machines.
Hashrate, which measures total network power, also experienced a sharp decline last month. Furthermore, the fact that a larger portion of rewards went to miners of “unknown” origin strengthens the possibility that equipment manufacturers may have begun running their own operations.
According to Morgan Stanley analysts, the solution could be converting mining facilities into AI data centers. The bank’s analysis indicates a significant global shortage in AI computing power. Morgan Stanley predicts that data center electricity demand in the US will increase by 74 gigawatts between 2025 and 2028. Considering already constructed centers and existing grid capacity, this could result in a deficit of approximately 49 gigawatts. Converting all Bitcoin mining sites in the US could reduce this deficit by 10-15 gigawatts.
These assessments are based on an agreement that took place in December. Hut 8 partnered with cloud platform developer Fluidstack to transform a cryptocurrency mining facility in Los Angeles into a data center. The client is AI company Anthropic, and payments are handled by Google.
According to Hashrate Index data, the US ranks first in global Bitcoin mining with a 37.5% share. Russia (16.4%) and China (11.7%) follow. The shift of US-based miners towards AI data centers could lead to a recession of network power to countries outside the US. This could weaken the US’s strategic position in the crypto ecosystem. This development could create a political contradiction, especially for Donald Trump, who promised to make the US the “crypto capital of the world” during his re-election campaign.
*This is not investment advice.