There is a clear tension emerging in the Bitcoin mining sector, where the growth in activity no longer translates into financial stability.
According to CoinShares Q1 2026 report in Bitcoin mining, Hashrate held nearly 1,020 EH/s after peaking at around 1,160 EH/s, showing that miners continue to grow despite pressure.
However, the hash price has dropped from over $60 to $30-$35, causing unit revenue to drop sharply. This happens because the halving reduced the block rewards, while the price did not increase enough to offset the cost.
As a result, production costs exceed current prices by nearly $80,000-$88,000, creating losses of $17,000-$19,000 per BTC.
Meanwhile, accounting rules magnify these losses through the revaluation of assets. This means that weaker miners may exit the market while stronger players consolidate, reducing supply and affecting future price stability.
Bitfarms growth increases as accounting losses increase
As mining margins tighten across the industry, Bitfarms report The results show how operational growth conflicts with financial results. Revenue rose 72% to $229 million, indicating stronger output from the expanded hashrate.
However, net losses widened to about $209 million, not due to weak operations but due to accounting pressures.
Depreciation was $98 million, impairment was $28 million, while $22 million reflected BTC price fluctuations. This happens because fair value accounting reflects past volatility even as current production improves.
Meanwhile, the hash price kept pressure on margins, limiting cash generation.
Yet shares rose about 6%, demonstrating investors’ focus on future positioning. This implies that markets expect miners to evolve beyond BTC exposure, where diversification could reshape valuation in the long term.
Bitfarms focuses on HPC and AI as mining margins shrink
As mining margins remain under pressure, Bitfarms is actively repositioning its business towards HPC and AI infrastructure to secure more stable revenues. The company is building a 2.2 GW pipeline, of which 341 MW is already active and 1.5 GW in expansion, aimed at the demanding data markets.
This shift is happening because the hash price remains compressed, making mining returns less predictable.
In response, Bitfarms is redirecting energy capacity to AI workloads, with long-term contracts offering higher margins and steady cash flow.
Industry trends support this move, with HPC revenue expected to reach 70% of mining income by 2026. The rebranding to Keel Infrastructure strengthens this transition.
This implies that Bitfarms is expanding beyond Bitcoin exposure and positioning itself for more resilient, infrastructure-driven growth.
All this together could price Bitfarms as an infrastructure play if HPC and AI deliver stable revenue growth. However, if mining remains dominant, BTC’s volatility will continue to drive profits, keeping the stock tied to cyclical crypto movements.
Final summary
- Bitcoin [BTC] Mining margins shrink as hash prices fall below costs, forcing weaker miners to leave while efficient players consolidate supply dynamics.
- Bitcoin’s volatility is still driving Bitfarms’ performance, but the HPC and AI pivot could shift the valuation toward stable, infrastructure-led growth.