Author: Zhou, ChainCatcher
Since the end of last year, listed mining companies have launched a wave of collective sell-offs.
Cango sold approximately 60% of its holdings, totaling 4,451 bitcoins, in February; Bitdeer liquidated its entire bitcoin inventory in January; Riot Platforms sold multiple times in December.、in the first quartersold3,778 BTC, and Core Scientificpreviouslyplanned to sell approximately 2,500 bitcoins in the first quarter.
Recently, leading mining company MARA announced that between March 4 and 25, it sold 15,133 bitcoins, generating over $1 billion in proceeds. The company also announced a reduction of approximately 15% of its workforce, as part of its strategic transformation into an energy and digital infrastructure company.
In fact, miners selling Bitcoin is not new. During the bear markets of 2018 and 2022, mining companies also underwent massive liquidations and capitulations, leaving behind only more efficient players. This time, however, the sell-off is triggered not only by falling prices but also by a new destination—AI data centers.
I. Three Motivations Behind the Sell-off
At first glance, it appears to be a coordinated sell-off by mining companies, but upon closer examination, their underlying motivations are not uniform and can be broadly categorized into three distinct selling strategies.
Mining itself has already become unprofitable.
The first and most direct one: cost pressure.
CoinShares' latest mining report shows that the current weighted average cash cost for publicly traded mining companies to mine one BTC is approximately $79,995, while the BTC market price hovers between $68,000 and $70,000, resulting in an average loss of nearly $19,000 per coin and an overall loss rate of about 21%.
This is no longer about narrowing profit margins—it’s about whether cash flow can sustain further mining.
Reportalsoshows that mining hash rate prices dropped to $28–30 per PH/day in early March,settinga new post-halving low.At this level, most active miners need electricity costs below $0.05 per kWh to remain cash-flow positive.Currently,,approximately 15% to 20% of global mining rigs are on the brink of break-even.
Meanwhile, geopolitical tensions in the Middle East are driving up energy prices, keeping electricity costs under sustained pressure—an external factor beyond miners' control.
QCP Group noted in its report that, with Bitcoin prices significantly below the average mining cost, mining companies are under considerable pressure, and liquidity priorities have surpassed hoarding strategies.
Under this context, forsomemining companies, selling Bitcoin is a practical necessity to sustain operations.
AI provides a more stable revenue logic.
The second motive, more strategic, is the most intriguing aspect of this selling wave.
Bloomberg analysis indicates that, unlike previous sell-offs aimed at covering costs, the funds from this round of selling are being reallocated to the artificial intelligence sector.
The business logic behind thisisclear: mining revenue is highly dependent on coin price, hash rate difficulty, and electricity costs, making it extremely volatile.In contrast,,AI infrastructure is more akin to long-term leases; according to CoinShares, its profit margins can reach 80% to 90%, offering highly predictable long-term revenue.
More importantly, mining companies already possess readily available resources—low-cost power contracts, built-out data centers, robust cooling systems, and experienced operations teams.
Some analysts point out that the cost of building Bitcoin mining infrastructure is approximately $700,000 to $1 million per megawatt, while AI infrastructure ranges from $8 million to $15 million per megawatt—a significant cost disparity that mining companies are now monetizing at scale.
Notably, this transformation is being driven by an unexpected group of players—tech giants and traditional financial institutions.
Previously,Google has disclosed over $5 billion in credit support, having provided credit guarantees for Fluidstack’s AI cloud platform lease obligations, and secured equity stakes by guaranteeing AI transitions for mining companies such as TeraWulf, Cipher Mining, and Hut 8; Microsoft signed a five-year, $9.7 billion AI cloud services contract with mining company IREN; and Morgan Stanley extended a $500 million loan to Core Scientific, with a potential total commitment of $1 billion.
Their entry has provided mining companies with far stronger capital backing than previously imagined for this transformation.
Meanwhile,mining companies such as Core Scientific, TeraWulf, Hut 8, and Cipher have signed large-scale AI/HPC contracts, with a cumulative value exceeding $70 billion. CoinShares reportnotesthat mining companies with AI/HPC contracts are valued at roughly twice the multiple of pure mining firms, as the market is rewarding those that have successfully transitioned first with a valuation premium.
Even the most financially sound and lowest-leveraged mining companies, such as HIVE, have proactively scaled back mining operations in favor of expanding into AI data centers. This demonstrates that the pressure to transition is no longer unique to highly indebted miners—it is a strategic direction facing the entire industry.
Actively use BTC as a financial instrument
The third logic is relatively shrewd and the most proactive.
Some mining companies choose to sell BTC not due to operational pressure, but as a tool to optimize their balance sheets,such asMARA. The specific approach is to use the proceeds to repurchase previously issued convertible bonds at a discount below their face value, thereby reducing liabilities and lowering the risk of potential equity dilution.
For such mining companies, BTC's role on the balance sheet has quietly shifted from a long-term holding symbolizing belief to a strategic asset that can be flexibly managed.
In addition, a relatively rare type of seller emerged in this selling wave: sovereign nations.
On-chain data shows that the Bhutanese royal government’s BTC holdings have decreased by approximately 66% from their peak at the end of 2024, with single transfers in March reaching $35 million to $45 million, and the pace of sales continuing to accelerate.
Unlike most countries that accumulate BTC through market purchases, Bhutan’s holdings originate from its domestic hydropower mining operations, and this large-scale sell-off may be related to funding needs for its national development projects. This is one of the largest recorded government Bitcoin sell-offs on record.
Three overlapping factors—mining losses, AI transformation, and debt optimization—combined with sovereign-level selling pressure, are subjecting the market to structural supply pressures from multiple, varied directions. The Bitcoin faith of mining companies is being reshaped by more pragmatic business logic.
II.After parting ways, everyone goes their own way.
Of course,selling does not equate to fully exiting; the remaining holdings and subsequent strategies of various mining companies are showing markedly different divergences.
Three paths, three choices
The first path,stick with mining.
Represented by companies such as CleanSpark and HIVE, they avoid chasing AI transformation narratives, refrain from accumulating additional debt, and instead rely on a combination of low electricity costs, next-generation mining hardware, and low leverage to emerge victorious during industry consolidation. The logic is that as high-cost capacity gradually exits, the revenue per unit of hashing power for remaining miners will rise.
CleanSpark has publicly stated that, at current hash rate prices, continuing to make large investments in Bitcoin mining is "no longer economically reasonable," but the company has chosen to remain committed to its core business, betting that the cycle will eventually turn.
Renownedcrypto KOLBlue Foxpoints out that historically, almost every halving has been followed by miners exiting the market, with only the more efficient players remaining to capture a larger share in the next rally.
For such mining companies, sticking to mining is not stubbornness, but a belief in the cyclical patterns.
The second path, walking on two legs.
Represented by MARA, IREN, and Riot, maintain a substantial BTC holding while simultaneously investing in AI/HPC to offset the cyclical fluctuations in mining revenue with the relatively stable income from AI operations.
These companies are essentially solving an asset allocation problem—the solution varies by company, but the core logic is that the two business lines support each other and diversify single-point risks.
A third path,fully embrace AI.
Represented by Core Scientific, TeraWulf, and Cipher. BTC holdings have stepped down from their position as core assets, and mining has gradually become a supplementary part of data center operations.
CoinShares expects that by the end of 2026, AI revenue could account for as much as 70% of some mining companies’ income, while mining revenue could decline from around 85% at the beginning of 2025 to less than 20%. These companies, though nominally mining firms, are effectively evolving into AI infrastructure operators with mining as their starting point.
The potential risk is that a heavy-asset transition implies a massive debt burden, and if demand for AI cools down, both businesses will come under pressure.
Alsohasviewpointspointed outthat Google’s credit guarantee structure through Fluidstack creates highly concentrated counterparty risk—the entire cash flow chain depends on Fluidstack as an intermediary, making this structure a single point of failure if the AI leasing market experiences significant changes.
BTC pricedecidestheirdestiny
No matter which path you choose, it ultimately points to the same variable: the price direction of BTC.
CoinShares presented three scenarios:
● If BTC rebounds to $100,000 by the end of 2026, hash rate prices will rise to approximately $37/PH/day, restoring mining profitability and easing overall industry pressure;
● If the price remains below $80,000, high-cost miners will accelerate their exit, making the traditional model of mining and holding coins until the next bull market increasingly unsustainable;
● If the all-time high is breached, hash rate prices could surge to $59/PH/day, triggering a new expansion cycle for the industry.
Conclusion
In summary, mining companies face only two possible outcomes: either the coin price rebounds, allowing them to return to their core business, with all this merely serving as a cyclical footnote in history; or the price remainspersistentlylow, leading more and more mining firms to transition into AI data centers, while the traditional business model of mining and holding coins for the next bull market becomes increasingly rare in this industry.
However,there is another issue beyond the business logic worth questioning: mining companies are not ordinary public corporations; continuous investment in hashing power is itself the security budget of the Bitcoin network.
Sazmining CEO Kent Halliburtonhas直言, these companies "hold power contracts, land, and infrastructure, yet hand these resources over to Microsoft and Google in exchange for rental checks, shifting from protecting the Bitcoin network to merely housing racks for hyperscale cloud providers."
When mining no longer generates sufficient economic returns, the rational business decision is to reallocate resources; but if this trend continues to spread, the question of who will bear the long-term cost of securing the Bitcoin network will become impossible to ignore.
This question, history may have already answered.
The Bitcoin network has undergone several major miner cleanups, and each time, it has operated with greater efficiency.
But this time, the miners who left didn't just turn off their machines.
Times have changed.