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Block reward miners are reeling from a difficulty whiplash, while the BTC token’s inability to sustain a price rally has mining investors pushing even harder for AI pivots.
- Mining difficulty soars, investors demand pivots
- Bitdeer sells all its BTC, insists this is fine
- MARA loses $1.7 billion, but shares rally on AI deal
- ABTC: So much winning leads to $153 million loss
- Cipher rebrands to distance itself from mining
- Hive losses rise on ‘shorter economic lives’ of ASICs
- Terawulf: Mining? Who, us?
BTC miners got a rude awakening this past weekend as the network difficulty rate shot up 14.7% to 144.4 trillion hashes required to ‘find’ a new block on the network and claim the block reward. That surge, the largest absolute increase in the network’s history, came after the rate fell 11% during the previous adjustment two weeks ago.
That decline came after January’s winter storms forced many U.S. miners to shut down their operations to relieve pressure on overloaded electricity grids. But as the weather improved and miners switched their rigs back on, the fight to win the 3.125 BTC reward per block became even more intense and ever more expensive.
As of Thursday afternoon, the all-in cost of mining a single BTC token (including depreciation/replacement of ASIC mining rigs) was $87,300, roughly $20,000 higher than BTC’s current value. That five-figure discrepancy is a vivid illustration of why miners are ‘pivoting’ to serving as data centers for AI and other high-performance computing (HPC) operations.
Bloomberg recently profiled the ‘schism’ between pure-play miners and those who have embraced the AI/HPC pivot. Clear Street managing director Brian Dobson didn’t mince words, saying “investor patience grows thin” when it comes to miners that continue to resist the ground shifting under their feet.
Last week, Riot Platforms (NASDAQ: RIOT) was publicly scolded by activist investor Starboard Value for not pivoting to AI fast enough. Starboard complained that Riot’s share price has “materially underperformed peers who have signed sizable AI/HPC deals.” Starboard called it a “frustrating” situation but not an intractable one, provided Riot responds with “a renewed sense of urgency” to accelerate its AI dealmaking.
Under a subhead declaring ‘The Time is Now,’ Starboard expressed faith that Riot is “on its way to a transformation from a bitcoin miner to a best-in-class AI/HPC data center company.” But “time is of the essence,” with Starboard implying that Riot didn’t want to get caught holding the hot ASIC potatoes when the mining music stopped (to mix our mining metaphors).
While Starboard didn’t mention it, Riot is the second-largest miner in terms of its BTC ‘treasury,’ holding 18,005 tokens, behind only the 53,250 tokens held by top-ranked MARA (NASDAQ: MARA). Presumably, Starboard would like to see Riot use some of these underperforming digital mothballs to build out its AI ops before the tokens’ value sinks further.
Riot’s share price is actually up one-third since the start of the year, closing Thursday at $17.09, basically flat for the day, and significantly better than the $12 the shares sank to earlier this month. Riot releases its Q4/FY25 financial report card on March 2, so it will be interesting to see whether it chooses to offer any public response to Starboard’s unsubtle appeal.
Bitdeer says mining a ‘cornerstone,’ it just doesn’t want to keep its BTC
Last week, JPMorgan analysts said Bitdeer (NASDAQ: BTDR) had officially overtaken MARA as the leading miner in terms of hashrate. According to JPM, Bitdeer’s hashrate hit 63.2 EH/s, handily eclipsing MARA’s 60.4 EH/s (caveat: MARA claimed a 66.4 EH/s in its Q4 report). This dethroning isn’t that surprising given that Bitdeer manufactures ASICs but is finding fewer buyers these days, so it’s been using the rigs it can’t sell to ramp up its self-mining ops over the past 12 months.
But even Bitdeer is heeding the siren song of AI/HPC. Bitdeer shocked many in the sector last week by casually tweeting on February 21 that its BTC holdings now stood at ‘0.’ Bitdeer closed out 2025 with just over 2,000 BTC in its treasury, and while it had sold roughly half this amount in recent weeks, this ‘0’ news did not go unnoticed.
Bitdeer felt compelled to address the resulting industry/investor histrionics the next day, saying its decision to sell the remaining 943 BTC in its reserve (plus another 190 BTC the company mined that week) “should not be a concern for the broader market.”
Bitdeer added that the company is “currently evaluating multiple non-binding powered land acquisition opportunities, and we believe it is prudent to prepare liquidity now. Our hash rate will continue to grow, and we will continue to mine more Bitcoin for the interest of our shareholders.”
Speaking of, Bitdeer investors had reason to cheer as the company’s Q4 report showed revenue hitting $224.8 million in the final three months of 2025, a more than threefold increase from the same period last year. Bitdeer reported a profit of $70.5 million, a serious turnaround from the nearly $532 million loss in Q424, although that latter figure includes a nearly $480 million one-time charge.
Bitdeer’s chief business officer Matt Kong called Q4 “a strategic inflection point” as the company continues to build out its AI/HPC business. But Kong insisted that mining remains “a cornerstone of our business” and “a significant long-term value driver.” It’s worth noting that these comments were made roughly one week before Bitdeer announced the full depletion of its BTC treasury.
MARA’s AI upside masks $1.7 billion loss
The downside of MARA’s all-in embrace of the BTC ‘treasury’ strategy was on full display in its own Q4 results, which showed revenue of $202.3 million, a 5.6% decrease from the same period last year. MARA booked an operating loss of $1.4 billion (versus a $341 million profit in Q424) and a net loss of $1.7 billion (versus a $525.5 million profit last year).
Nearly $1 billion of Q4’s operating loss came from the change in the value of MARA’s BTC treasury. A significant portion of this treasury was acquired at far higher values than the token held at the end of 2025, and those prices have only sunk lower as 2026 got underway. Worse, MARA took on billions in new debt to acquire many of these tokens.
But help is on the way thanks to MARA’s new AI/HPC joint venture with Starwood Digital Ventures, the data center development offshoot of Starwood Capital Group. Announced Thursday, the JV “will enable the conversion and expansion of select MARA sites into next generation digital infrastructure capable of meeting the growing demand from enterprise, hyperscale and AI customers.”
The MARA sites being converted “will be designed to operate both Bitcoin mining and AI compute.” MARA said BTC mining “remains an integral part” of its “intentional transformation of our business from a pure-play Bitcoin miner into an energy and digital infrastructure company.”
The Starwood announcement explains why MARA’s shares soared 15% in after-hours trading after closing Thursday down a modest 1.4% to $8.45. For the year-to-date, MARA’s shares are down 6% but the six-month decline is nearly 47%.
ABTC: big talk, big losses
American Bitcoin Corp (ABTC) (NASDAQ: ABTC), the Trump-linked mining group that was spun out as a separate entity of miner Hut 8 (NASDAQ: HUT) last year, recently boasted that its BTC treasury had topped 6,000 tokens, putting it at #17 on the list of BTC treasury firms (Hut 8 currently ranks ninth with 13,696).
That’s about where ABTC’s good news ends, as its Q4 results showed revenue of $78.3 million (+22% from Q3), but the plummeting value of BTC in its treasury resulted in a $112.2 million unrealized loss and a net loss of $59.5 million.
For the year as a whole, ABTC reported revenue of $185.2 million, but a $227 million paper loss on its BTC resulted in a net loss of $153.2 million.
ABTC’s paper losses reflect the fact that only around one-third of its BTC treasury is mined tokens, with the rest acquired “through strategic transactions and at-the-market purchases.” With BTC having lost nearly one-half its value since its early October peak, and traded well above its current price throughout 2025, it’s reasonable to assume that all or nearly all of ABTC’s purchased BTC are currently loss-making.
Regardless, ABTC’s co-founder/chief strategy officer Eric Trump claimed the company’s results reflected “decisive execution and a team operating with conviction.” Trump later tweeted that ABTC’s “future is unlimited.”
Investors were slightly less emphatic, nudging ABTC’s stock up nearly 3% on Thursday to $1.08, although the stock fell 1% in after-hours trading. Since the year began, ABTC’s shares have been down 36.5%, while the price has fallen nearly 83% over the past six months.
Cipher rebrands to rid itself of mining taint
Cipher Mining’s (NASDAQ: CIFR) embrace of the AI pivot is sufficiently committed that the company announced this week that it would henceforth be known as Cipher Digital, in recognition of what CEO Tyler Page called the company’s “successful shift in our business model and strategic priorities going forward.”
Cipher stopped reporting its monthly BTC production numbers last year, so this rebrand isn’t entirely surprising. Cipher said that while mining “played a foundational role in building Cipher’s power origination expertise and large-scale development capabilities, the Company’s identity has evolved to focus on enabling next-generation compute at industrial scale.”
In keeping with this pivot, Cipher has sold its 49% stake in three joint venture mining sites, along with “select bitcoin machines” to rival Canaan Inc. (NASDAQ: CAN). Cipher claims the $40 million deal will allow it to “maintain optimized exposure to the bitcoin mining industry in a capital-light manner” while also helping fund its AI/HPC ambitions.
Cipher may claim a desire to maintain a mining toehold for a bit longer, but its Q4/FY25 business update contains a slide detailing its ‘Bitcoin Mining Exit Strategy.’ This strategy includes ‘strategically monetizing’ the 1,166 BTC tokens in its treasury, which is being “strategically managed down.”
Cipher reported mining revenue of $59.7 million in the three months ending December 31, down from $71.7 million in Q3. Cipher booked a Q4 operating loss of $300.6 million and a net loss of $734.2 million, with most of the red ink coming from costs associated with its ongoing pivot.
Cipher previously secured billions of dollars in commitments from the likes of Google (NASDAQ: GOOGL), but the company has since raised an additional $3.73 billion via three separate offerings, with the proceeds aimed at furthering the development of its two Texas-based HPC projects, Barber Lake and Black Pearl.
Record BTC returns, but Hive mind is all about AI/HPC
Hive Digital (TSXV: HIVE) reported revenue of $93.1 million in the three months ending December 31 (Hive’s fiscal Q3), up 7% from Q2 and up 219% year-on-year, marking a new record high for the company. The bulk ($88.2 million) of this bounty came from mining ops, with the rest ($4.9 million) from HPC hosting.
However, the company posted a net loss of $91.3 million in the quarter, compared with a $68.2 million profit in Q325. The loss was driven by $57.4 million in depreciation costs (‘accelerated’ by Hive’s Paraguay site expansion and the “shorter economic lives of new ASICs”), plus another $31.6 million in the change in fair value of derivatives.
To grow its HPC operations, Hive signed a $30 million deal this month to acquire 504 Nvidia (NASDAQ: NVDA) B200 GPUs over the next two years. The goal is to boost GPU AI Cloud annual recurring revenue to $140 million by Q426. Notably, Hive’s earnings commentary praised its ongoing mining ops, but the focus was squarely on its AI/HPC prospects.
Hive’s shares have fallen 13% since the year began, but closed Thursday basically where they opened at $2.28.
Terawulf: ‘mining’ is like ‘Voldemort,’ don’t say it aloud
Finally, TeraWulf (NASDAQ: WULF) doesn’t talk about its mining operations much anymore, and while that aspect of its business continues to shrink, this unwanted bastard redheaded stepchild nonetheless represented the bulk of its Q4 and FY25 revenue.
Terawulf reported revenue of $35.8 million in Q4, 29% less than in Q3, thanks to BTC’s falling price, the increased cost of winning network blocks, and Terawulf’s declining interest in trying to win those network blocks. Of Q4’s revenue, $26.1 million came from mining (down from $43.4 million in Q3) while HPC lease revenue hit $9.7 million (up from $7.2 million).
For 2025 as a whole, total revenue rose one-fifth to $168.5 million. Mining revenue rose 8.2% to $151.5 million, while the $16.9 million in HPC lease revenue was entirely surplus, as Terawulf didn’t bother with that stuff in 2024.
The company reported an operating loss of $186.2 million, more than twice 2024’s loss, while its net losses soared from $72.4 million to $661.4 million, largely due to all the financing hoops it’s been jumping through to complete its pivot.
Terawulf’s Q4/FY presentation didn’t so much as mention mining—like, not once—and the company’s 2026 priorities are entirely focused on AI/HPC. So, as far as the crypto world is concerned, it’s good night and good luck, Terawulf. For old time’s sake, we’ll note that the company’s shares closed Thursday basically flat at $17.88 but lost 4% in after-hours trading.
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