Bitcoin hashrate sheds 145 EH/s as miners pivot to AI data centers

Bitcoin's hashrate fell 145 EH/s since May, the first such contraction in six years, as miners diverted power and sold BTC to fund AI data centers.

"AI is sucking all the oxygen out of the room, all of the liquidity out of the room," Luke Gromen, founder and CEO of Forest For The Trees, said in a recent interview. "Bitcoin is a victim of that as well."

The hashrate decline coincided with Bitcoin trading near $60,000 on June 5, its lowest since before the November 2024 US election, according to CoinGecko. Publicly listed miners have sold more than 15,000 BTC from corporate treasuries, with Core Scientific alone liquidating $175 million worth of Bitcoin in March. The sector has also taken on billions in debt: IREN carries roughly $3.7 billion in convertible notes, while TeraWulf has around $5.7 billion in total debt.

The structural shift means the converted capacity is unlikely to return to mining even if Bitcoin rallies, analysts said. The 15-year lease structures dominating new AI contracts make reverse migration economically irrational, locking in a permanent reduction in the computing power securing the Bitcoin network.

The 145 EH/s contraction since the May close marks what analysts are calling Bitcoin's first "hashrate bear market." The network's computing power had grown almost uninterrupted for six years before this reversal, according to Hashrate Index data.

The driver is a sector-wide pivot that has seen public Bitcoin miners secure more than $70 billion in cumulative AI and high-performance computing contracts. Hut 8 signed a 15-year, $9.8 billion lease for a 352-megawatt Texas facility built to Nvidia's reference architecture. TeraWulf locked in $12.8 billion in contracted AI revenue. IREN secured a $9.7 billion deal with Microsoft for 76,000 Nvidia GPUs.

To fund the transition, miners are selling the asset they were built to produce. Listed miners have collectively reduced their Bitcoin treasuries by more than 15,000 BTC from peak levels. Cipher Digital issued $1.7 billion in senior secured notes, causing its quarterly interest expense to surge from $3.2 million to $33.4 million in a single quarter.

The pivot is being priced by equity markets as a near-certain win — a tracked basket of mining stocks rose 56% year-to-date even as Bitcoin fell about 17%, according to 10X Research. But the risks are mounting. Overbuilding AI data center capacity relative to demand could compress the hosting margins that make the strategy attractive. AI workloads, unlike interruptible Bitcoin mining, cannot be easily curtailed during peak grid demand, creating friction with state regulators over power pricing and water usage.

For Bitcoin, the consequences extend beyond the hashrate. The 15,000-plus BTC that miners have sold adds supply pressure to a market already under strain. And the 15-year lease structures mean the converted capacity is not coming back — even a Bitcoin price recovery to $80,000 or higher would not pull power back to mining, analysts concluded. Bitcoin's dominance has also slipped as capital rotates toward AI-linked assets, with the network's security budget now competing directly with hyperscaler demand for the same power resources.

This article is for informational purposes only and does not constitute investment advice.