The rise of artificial intelligence (AI) and demand for computing resources to train models offered Bitcoin miners a new lifeline amid dwindling miner rewards.
Bitcoin miners such as Iren (Nasdaq: IREN), Applied Digital Corp (Nasdaq: APLD) and Hut 8 Corp (Nasdaq: HUT), have repurposed their mining rigs for AI and reported huge stock gains in 2025.
Source: Artemis
But some miners are not only diversifying their activities but also moving away from BTC and crypto mining altogether.
For example, Bitfarms (Nasdaq: BITF) recently sold its BTC mining facility in Paraguay to “reinvest in their North American HPC/AI energy infrastructure by 2026.”
Another miner, Riots Platform (Nasdaq: RIOT), fully inked an AI deal with AMD financed by selling 1,080 BTC from its balance sheet. These miner actions and dumps have fueled pressure on crypto assets.
Will AI put pressure on BTC?
Moreover, the mining sector as a whole is struggling to keep its head above water. Because mining costs have risen above current ones Bitcoin [BTC] price. Hash Ribbon, the indicator that tracks this capitulation of miners, was marked at the end of November (red shades).
It always forces miners to sell BTC to cover operational costs.
Source: Glassnode
Historically, the miners capitulation also tends to act as a bottom signal and a good buying opportunity (white zones) when the 30-day average (green) breaks above the 60-day average (blue).
While such a shift was close and a solid structural recovery in BTC’s price was likely, the miner’s AI pivot also revealed another side of BTC that hasn’t attracted much attention.
With each BTC halving event, the block rewards miners receive are reduced by half. In 2020 this was 6.25 BTC; after the 2024 halving, rewards dropped to 3,125 BTC. And after the upcoming event in 2028, the new rewards will drop even further to 1.5625 BTC.
Unless the value of BTC explodes higher, mining would be less lucrative in the future compared to AI returns.
Will Bitcoin Network Security Falter?
Amid this drop in rewards, transaction fees were intended to cover this shortfall. Collectively, block rewards and transaction fees form the security budget that keeps miners working to secure the network.
However, with block grants falling and fees failing to provide coverage, the founder of venture capital firm Cyber Capital, Justin Bons, has warned,
“BTC security is lower now than it was five years ago! The security budget will continue to decline until the network is attacked.”
Source: Dune
Final thoughts
- The AI pivot of the BTC miners and the broader mining sector put pressure on the markets.
- While a market shift was imminent if the Hash Ribbon indicator disappeared, the sustainability of BTC mining remained unclear.