Table of Contents
ToggleDigital asset management firm CoinShares recently released its Bitcoin (BTC) mining industry report for the first quarter of 2026. The data shows that mining companies are experiencing their most difficult operational winter since the block reward halving in April 2024. With the price of Bitcoin falling from a high of approximately $124,000 in the fourth quarter of 2025 to $86,000, coupled with persistently high network hashrate, mining profit margins are being squeezed like never before.
Hashrate prices have fallen to a low point, while mining costs have soared to nearly 80,000 magnesium.
The report indicates that in the fourth quarter of 2025, the weighted average cash cost for listed mining companies to produce a single Bitcoin had climbed to approximately $79,995. More seriously, the "hash price," a measure of mining profitability, fell to $36-38 per hash/s per day in the fourth quarter, and is projected to further decline to $29 in the first quarter of 2026. This means that approximately 15% to 20% of older mining rigs globally (with performance lower than the S19 XP and electricity costs exceeding $0.06 per kilowatt-hour) are currently operating at a loss.
Mining companies are experiencing a wave of capitulation, selling off over 15,000 BTC.
Due to a sharp drop in profits, the Bitcoin network experienced its first "three consecutive mining difficulty reductions" since July 2022, which was seen as a clear signal of miners' capitulation. In order to maintain operating cash flow, many publicly traded mining companies were forced to liquidate their digital assets.
According to CoinShares statistics, the total Bitcoin holdings of listed mining companies have plummeted by more than 15,000 from their peak. Core Scientific alone sold approximately 1,900 Bitcoins (worth about $175 million) in January and plans to liquidate all remaining holdings in the first quarter; Bitdeer also reduced its Bitcoin reserves to zero in February; and Riot sold 1,818 Bitcoins in December.
Is transforming into an AI computing center a lifeline? The scale of debt is staggering.
While the core mining business faces challenges, a significant divergence has emerged between pure Bitcoin mining companies and those actively transforming into infrastructure providers. The report indicates that a growing number of mining companies are accelerating their shift towards artificial intelligence (AI) and high-performance computing (HPC). To date, publicly traded mining companies have announced AI/HPC contracts worth over $70 billion. Companies including TeraWulf (WULF), Core Scientific (CORZ), Cipher Mining (CIFR), and Hut 8 (HUT) are gradually transforming from pure Bitcoin miners into data center operators focused on providing AI computing power.
However, this wave of transformation has also been accompanied by massive capital restructuring and debt risks. To build expensive AI infrastructure, mining companies have taken on enormous debt. For example, IREN issued $3.7 billion in convertible notes, TeraWulf's total debt reached $5.7 billion, and Cipher Mining issued $1.7 billion in senior secured notes. This fundamental shift in capital structure makes it difficult to directly compare these companies' financial statements with those of traditional pure-play mining companies.
Looking ahead, CoinShares anticipates that if the price of Bitcoin can successfully recover to the $100,000 mark, the hashrate price is expected to rebound to a healthy level of $37; if the price can challenge the historical high of $126,000, the hashrate price will reach $59. In the short term, the market will continue to eliminate inefficient and outdated production capacity, further driving industry reshuffling and restructuring.
Related reports
