CoinShares Report: 15-20% of Bitcoin Mining Capacity Underwater in 2025 Shakeout

Bitcoin mining is hitting a wall, and the impact could ripple across the entire crypto ecosystem. CoinShares, a prominent digital asset investment firm, has released a damning report warning that 15-20% of global Bitcoin mining capacity is operating below breakeven, caught in a brutal shakeout driven by slashed rewards and crashing prices. As profitability evaporates for many, some miners are scrambling for new revenue streams, while others face the grim prospect of shutting down.

• Profitability Crisis: 15-20% of miners are unprofitable post-April 2024 halving and a 31% Bitcoin price drop to $86,000.
• Hashprice Collapse: Revenue per unit of computing power down to $28–$30 per PH/s, below many operating costs.
• Survival Pivot: Miners shifting to AI and high-performance computing (HPC) for stability, potentially up to 70% of sales.

The Profitability Crunch: A Perfect Storm

The Bitcoin mining industry has always been a high-stakes game, but the current environment feels like a knockout punch for many operators. Since the April 2024 halving—a programmed event that cuts miner rewards in half every four years to maintain Bitcoin’s scarcity—baseline revenue has taken a permanent hit. This mechanism, while crucial for Bitcoin’s deflationary model, leaves miners vulnerable when market conditions sour. And sour they have: Bitcoin’s price plummeted 31% from a peak of around $124,500 in October 2025 to just $86,000 by December 2025. At the same time, the network’s hashrate—a measure of total computing power securing Bitcoin, akin to the horsepower of an engine—sits near an all-time high of 1,020 exahashes per second (EH/s). This unrelenting competition means miners are scrapping over a shrinking pot of rewards.

Hashprice, a vital metric showing daily revenue per unit of computing power (measured in petahashes per second, or PH/s), tells the ugly story. It’s fallen from $36–$38 per PH/s in late 2025 to a meager $28–$30 per PH/s by early 2026, as highlighted in a recent CoinShares analysis on Bitcoin mining challenges. For context, hashprice factors in Bitcoin’s market price, network difficulty (how hard it is to mine a block), and transaction fees. When it dips below operating costs, miners lose money with every watt of power consumed. CoinShares estimates the average cost to mine one Bitcoin for publicly listed companies hit $79,995 in Q4 2025—a figure that looms large over an $86,000 market price, leaving razor-thin margins even for the efficient players. If you’re stuck with older hardware like the Antminer S19 XP (a once-popular high-efficiency rig) or paying electricity rates above $0.06 per kilowatt-hour (kWh), you’re likely bleeding cash. It’s a far cry from the “moon lambos” promised in crypto’s early hype days.

Signs of Capitulation: Miners Unplugging

The strain is showing in the data. Late 2025 marked a rare event: three consecutive downward adjustments in mining difficulty, something not seen since July 2022 after China’s 2021 mining ban rocked the industry. Mining difficulty reflects how challenging it is to solve the cryptographic puzzles needed to validate transactions and earn Bitcoin rewards. When it drops, it often signals that miners are switching off their machines, reducing the network’s total computing power. Think of it as players leaving a poker table when the stakes get too high. Yet, despite this hint of capitulation, Bitcoin’s hashrate remains stubbornly close to its peak, suggesting that while some are bowing out, others—likely well-funded or newly equipped—are still jumping into the fray or refusing to fold.

CoinShares pulls no punches in their assessment of what this means.

“The recent downturn [is] not as a routine cyclical dip, but as the beginning of a structural reordering that may narrow the field to only the most efficient and well-capitalized operators,”

they note. Translation: this isn’t just a bad quarter; it’s a purge. Smaller miners or those with high costs and outdated setups could face shutdowns, forced asset sales, or mergers as the industry consolidates. This isn’t new—post-2018 price crashes saw hashrate drops of over 30% as weak hands folded—but Bitcoin has historically emerged stronger, with leaner operators taking the reins. The question now is whether this shakeout will follow the same pattern or expose deeper cracks.

AI as a Lifeline: Miners Pivot for Survival

Not every miner is sitting around waiting for Bitcoin to rally back above $100,000. Many are diversifying into alternative workloads like artificial intelligence (AI) and high-performance computing (HPC), which require vast computational resources—something miners already have in spades with their data-center infrastructure. According to CoinShares, AI and HPC currently make up 30% of sales for listed mining companies, with projections that this could soar to 70% if planned buildouts come online. We’re talking big money here: over $70 billion in AI/HPC deals have been announced, some with contracts stretching over a decade.

“AI infrastructure can offer structurally higher and more stable returns when backed by long-duration contracts,”

CoinShares points out. In essence, miners are trading the wild volatility of Bitcoin’s hashprice for the steadier income of tech infrastructure deals—less “to the moon,” more “to the server room.”

Take a hypothetical example: a mid-sized miner in Texas, facing electricity costs of $0.08 per kWh, finds their Bitcoin operations underwater at current hashprice levels. Instead of shutting down, they repurpose 60% of their rigs to process AI training data under a five-year contract with a tech firm, securing predictable cash flow while keeping a smaller crypto mining operation alive for potential price recoveries. This isn’t just survival; it’s a reinvention. Miners are positioning themselves as general-purpose data-center operators, a move that could redefine the industry’s future.

The Double-Edged Sword of Diversification

While pivoting to AI and HPC offers a lifeline, it’s not without trade-offs, especially for Bitcoin’s core ethos of decentralization. Mining secures the Bitcoin network through proof-of-work, a consensus mechanism where computational power validates transactions and prevents double-spending. Miners are incentivized by rewards to keep the system honest—the so-called “security budget.” If a significant chunk of mining infrastructure gets repurposed for AI workloads, less hashrate is dedicated to Bitcoin, potentially thinning out the network’s defenses. Simulations suggest that if hashprice stays below $30 per PH/s and 20% of capacity exits, a theoretical 51% attack—where one entity controls the majority of hashrate to manipulate the blockchain—becomes marginally more feasible, though still prohibitively expensive at estimated costs exceeding $10 million.

On the flip side, there’s an argument that this diversification could stabilize the industry. Miners with hybrid revenue streams might weather Bitcoin price dips better, ensuring they don’t unplug entirely during bear markets. Consolidation into larger, more efficient firms could even provide consistency—think of it as fewer but stronger sentinels guarding the network. Yet, this risks creating new “too big to fail” gatekeepers, a scenario that clashes with Bitcoin’s promise of a system immune to centralized control. It’s a tension between pragmatic adaptation and ideological purity, one that the community will need to grapple with as these trends unfold.

Risks to Bitcoin’s Security: Centralization Creep?

This shakeout isn’t just about miners’ bottom lines; it’s about Bitcoin itself. The network’s security hinges on a decentralized pool of miners competing to validate transactions. If too many operators exit or merge into a handful of mega-firms, the hashrate could concentrate, making the blockchain more vulnerable to coercion or control by a few powerful players. Historically, Bitcoin has dodged this bullet—post-China ban, hashrate redistributed globally, with North America picking up much of the slack. Today’s resilience, with hashrate near 1,020 EH/s despite profitability woes, suggests a maturing ecosystem unwilling to collapse at the first sign of trouble.

But let’s play devil’s advocate: periodic purges like this might be healthy. They weed out inefficiencies, force innovation, and harden the network over time, much like forest fires clear deadwood for new growth. A leaner mining sector, dominated by operators with cutting-edge rigs and rock-bottom power costs, could make Bitcoin more robust against future shocks. Still, the short-term pain is real, and for every efficient giant that rises, countless smaller players—often the lifeblood of decentralization—get crushed. For Bitcoin maximalists, this is a gut check: proof-of-work is the backbone of the system, a unique gauntlet that no altcoin like Ethereum (post-merge to proof-of-stake) faces in quite the same way. Will this trial by fire forge a stronger network, or chip away at its distributed foundation?

Who Survives? The Darwinian Blueprint

CoinShares lays out a clear survival guide for miners caught in this storm.

“Only operators combining ‘low-cost power,’ ‘latest-generation hardware,’ and a ‘stable capital structure’ are positioned to endure,”

they emphasize. Breaking that down: electricity costs below $0.06 per kWh are non-negotiable—think hydropower in Quebec or stranded natural gas in Texas. Hardware must be top-tier, like Bitmain’s latest S21 Pro rigs boasting 15% better efficiency than the S19 XP, or better. And financially, miners need minimal debt and low interest burdens to avoid a death spiral of loans they can’t service when hashprice tanks. A Bitcoin price recovery above $100,000 might buy breathing room, but without these structural advantages, even a rally won’t save the stragglers.

Looking back, this isn’t the first miner bloodbath, nor will it be the last. Veterans who mined through the 2014 Mt. Gox collapse or the 2018 bear market know the drill: adapt or die. But with AI as a new wildcard, the playbook is evolving. The next few months will reveal whether this shakeout streamlines Bitcoin’s infrastructure or sows seeds of centralization that haunt the network later. One thing is certain—raw capitalism is at play, forcing innovation at breakneck speed. Could this pain be the catalyst Bitcoin needs to accelerate toward a bulletproof future?

Key Questions on Bitcoin Mining Crisis

• What’s fueling the current Bitcoin mining shakeout?
  The April 2024 halving cut block rewards, a 31% Bitcoin price drop to $86,000 reduced revenue, and a near-peak hashrate of 1,020 EH/s intensified competition, rendering 15-20% of mining capacity unprofitable.
• Why are miners shifting to AI and HPC workloads?
  These fields promise higher, more predictable returns through long-term contracts, unlike the volatile hashprice of Bitcoin mining, with potential to account for 70% of listed miners’ revenue.
• What evidence shows miners are capitulating?
  Three consecutive mining difficulty reductions in late 2025—a rare signal last seen in 2022—indicate some miners are shutting down, though high hashrate suggests others persist or new players are entering.
• Does this crisis threaten Bitcoin’s security?
  Possibly, as miner exits or consolidation could centralize hashrate, raising risks of control by a few entities, though a leaner, efficient industry might also strengthen long-term resilience.
• Which miners are likely to survive this downturn?
  Those with low-cost power under $0.06/kWh, cutting-edge hardware like the latest Bitmain models, and solid financials with low debt stand the best chance of enduring.