Bitcoin miners are increasingly shifting their attention toward artificial intelligence as AI-related infrastructure begins to deliver better returns than traditional mining, according to CoinShares. The trend is squeezing mining margins even as the U.S. continues to expand its portion of the global Bitcoin hash rate.

CoinShares’ Q1 2026 Bitcoin Mining Report showed that Bitcoin’s hash price dropped to approximately $29-$30 per petahash per second per day in early Q1, compared with about $36-$38 during Q4 2025.

The revenue mix for listed miners could also change dramatically this year. CoinShares estimates that AI infrastructure could generate as much as 70% of their revenue by the end of 2026, compared with roughly 30% currently.

Mining costs are adding to the pressure. The report placed the weighted-average cash cost of producing one Bitcoin for publicly listed miners at approximately $79,995 in Q4 2025.

The growing competition between Bitcoin mining and AI is largely a battle for electricity, data-center space and capital. CoinShares said AI infrastructure can provide miners with higher and more stable returns while mining hash prices remain close to cyclical lows.

That gives operators with access to large-scale electricity and established data-center infrastructure a financial incentive to dedicate more resources to high-performance computing.

AI changes the mining equation

The growing AI business does not mean U.S. miners are abandoning Bitcoin.

CoinShares said the U.S. share of the global Bitcoin hash rate increased by around two percentage points quarter over quarter. Instead of leaving mining altogether, several publicly traded companies are developing hybrid businesses in which AI and HPC operations operate alongside Bitcoin mining.

AI is competing directly with mining for available rack space and electricity, potentially encouraging miners to move Bitcoin operations toward cheaper and more flexible power sources.

Publicly listed mining companies have announced more than $70 billion in cumulative AI and HPC contracts. The difference in infrastructure costs is significant: Bitcoin mining facilities generally require around $700,000-$1 million per megawatt, while AI infrastructure can cost approximately $8 million-$15 million per megawatt.

Several miners highlight the scale of this transition.

Core Scientific has around 350 megawatts energized for HPC, with approximately 200 megawatts billed. Its contract with CoreWeave has grown to $10.2 billion over 12 years.

TeraWulf has 39 megawatts of critical IT capacity operating at Lake Mariner and has secured $12.8 billion in contracted HPC revenue.

IREN has expanded its operations to more than 10,900 Nvidia GPUs, while Hut 8 has entered into a $7 billion, 15-year Fluidstack lease covering 245 megawatts at its River Bend campus.

AI and HPC still account for a relatively small portion of some miners’ businesses, but the contribution is rising. CoinShares said AI/HPC colocation generated 39% of Core Scientific’s Q4 revenue and represented 27% of TeraWulf’s revenue.

IREN’s AI Cloud business contributed 9%, while HIVE’s HPC operations accounted for 5%.

The transition is also happening at different speeds. CoinShares identified IREN and Bitfarms as miners repositioning toward HPC while retaining Bitcoin mining as a bridge between their existing operations and new businesses.

CleanSpark continues to emphasize Bitcoin mining in the near term while developing its AI exposure. Marathon has focused on smaller containerized sites of roughly 10 megawatts that can take advantage of intermittent electricity.

This highlights an important difference between the two industries. Bitcoin miners can shut down equipment when power becomes unavailable or too expensive, whereas AI workloads generally require near-continuous uptime.

Hash prices continue to pressure miners

CoinShares described Q4 2025 as the most difficult quarter for miners since the April 2024 Bitcoin halving.

Bitcoin’s price correction, a near-record hash rate and three consecutive negative difficulty adjustments combined to drive hash prices lower. It was the first streak of three straight negative adjustments since July 2022.

The pressure carried into Q1 2026. Hash price briefly fell to approximately $28 per PH/s per day in late February before recovering to between $30 and $35.

CoinShares expects additional high-cost miners could be forced out of the market during the first half of 2026 if Bitcoin fails to recover.

Mid-generation mining equipment requires electricity costs below 5 cents per kilowatt-hour to remain profitable. Newer machines operating below 15 J/TH generally maintain stronger margins at typical industrial electricity prices.

The increasing AI presence also makes it harder to assess the underlying economics of hybrid mining companies.

Expenses tied to AI facilities, including debt, depreciation and overhead, can influence reported Bitcoin production costs even when mining output is declining. This creates a growing overlap between traditional mining economics and data-center economics.

Core Scientific’s failed merger with CoreWeave demonstrates the accounting challenges involved. Shareholders rejected the deal on Oct. 30, 2025. CoinShares said Core Scientific later restated its financial statements after assets scheduled to be demolished as part of its HPC conversion had been improperly capitalized.

Bitcoin’s price could determine the balance

CoinShares said a sustained hash-price recovery above $40 per PH/s per day would likely require Bitcoin to climb toward $100,000 by the end of 2026, with BTC’s gains also needing to outpace continued growth in network hash rate.

If Bitcoin remains below $80,000 for the rest of the year, hash prices could fall further if mining difficulty continues increasing. However, shutdowns among less-profitable miners could lower the network hash rate and potentially limit the decline.

CoinShares said it remains uncertain whether the industry’s AI pivot will become permanent. Bitcoin mining profitability is still heavily dependent on BTC’s price, so a meaningful recovery could prompt some companies to shift capital back toward mining.

For now, the move into AI appears to be driven primarily by differences in expected returns rather than a complete departure from Bitcoin mining.

Miners with access to inexpensive electricity, flexible power agreements and intermittent energy sources may retain an advantage in traditional mining, particularly at facilities that cannot provide the continuous power and uptime demanded by AI workloads.