Profit margins collapse across mining industry
November 2025 turned out to be a brutal month for Bitcoin miners. I think we saw something pretty significant happen here—profitability dropped to levels that just don’t make sense for most operations anymore. The hash rate fell below $35 per petahash per second, which sounds technical but basically means the money coming in from mining dropped sharply. Meanwhile, costs went up to $44.8 per petahash.
That math creates payback periods stretching beyond 1,200 days. Imagine buying expensive mining equipment and waiting over three years just to break even. That’s the reality miners faced. Fred Thiel from MARA put it bluntly—after the 2028 halving cuts block rewards to about 1.5 BTC, most current business models will simply collapse.
The AI pivot accelerates
Here’s where things get interesting. When your main business stops working, you have to find something else. Seven out of ten top mining companies are now earning revenue from artificial intelligence infrastructure. That’s not a small shift—it’s a fundamental change in what these companies actually do.
Bitfarms announced they’ll phase out Bitcoin mining completely within two years. Their Washington State facility will become a high-performance computing data center by December 2026. Ben Gagnon, their CEO, thinks potential returns could beat all previous mining income. That’s a pretty bold statement.
IREN secured a massive $9.7 billion deal with Microsoft for GPU cloud computing. The agreement includes a 20% upfront payment, which helps with cash flow during this transition period. They’ll be deploying NVIDIA’s latest GB300 GPUs starting in 2026.
Capital restructuring on a massive scale
Companies are raising huge amounts of money to fund this shift. CleanSpark raised $1.15 billion at 0% interest. TeraWulf did $1.025 billion, also at zero percent. That’s unusual financing—zero interest suggests investors see something valuable here beyond traditional mining.
IREN plans to raise $2 billion through convertible bonds. Bitfarms completed a $588 million convertible debt issuance. The equipment commitments are equally staggering—IREN signed a $5.8 billion agreement with Dell just for NVIDIA GPUs.
What strikes me is the scale of this capital movement. It’s not just small adjustments; it’s billions of dollars being redirected from Bitcoin mining to AI infrastructure.
Regulatory landscape splits
Different countries are taking very different approaches. Malaysia uncovered about 14,000 illegal mining operations over five years, with stolen electricity causing $1.1 billion in damage. They’ve set up a task force to crack down harder.
Russia is using AI to fight illegal mining—embedding analytics into smart meters to detect power anomalies. One recent bust involved $1.5 million in stolen electricity.
But some governments are embracing mining. Japan launched its first government-linked project through a major utility. Belarus declared cryptocurrency mining a national priority for electricity usage, suggesting crypto could be an alternative to dollar reliance.
Bitcoin accumulation continues
Despite the challenges, leading miners are holding onto their Bitcoin rather than selling. MARA holds 53,250 BTC worth about $5.6 billion. CleanSpark reported 13,054 BTC as of November 30, with monthly production reaching 587 BTC in November alone.
Cango holds 6,412 BTC with a clear long-term holding strategy. Bitdeer increased reserves to 2,233 BTC. This accumulation suggests miners still believe in Bitcoin’s long-term value, even as they diversify into AI.
Perhaps the most telling detail is that AI hosting yields already exceed traditional mining returns by about 50% per megawatt. When the numbers speak that clearly, businesses listen. The industry that once focused entirely on Bitcoin is becoming something else—a hybrid of cryptocurrency mining and artificial intelligence infrastructure. It’s not just about surviving the current profitability crisis anymore; it’s about building something new that can last.
