Bitcoin’s mining economics tightened further as on-chain activity cooled and miner revenues hit fresh lows. The Luxor Hashrate Index now estimates the daily return for 1 terahash per second of hashing power at just $0.28, down from $0.39 a month earlier, underscoring a profitability squeeze for operators who still hold substantial BTC exposure—the combined holdings of miners and mining pools exceed $110 billion in Bitcoin.
Meanwhile, a shift in demand toward AI infrastructure is influencing how miners allocate capital. Bernstein analysts have argued that the primary bottleneck for scaling AI data centers is electricity, a constraint that has prompted some miners to repurpose parts of their power assets to support AI workloads rather than pure mining. On the hardware profitability front, the estimated monthly gross profit for an Antminer S21 XP Hydro at an electricity rate of $0.07 per kilowatt-hour has slipped to about $137, from $192 last month.
Bitcoin’s price drifted toward the $60,000 level as these dynamics played out, with uncertainty about whether the market can sustain a meaningful move higher given the backdrop of cooling on-chain activity and tightening mining economics. The broader narrative remains that AI demand is reshaping how mining infrastructure is deployed, even as spot BTC demand from institutions continues to influence price formation.
The on-chain picture also shows miners tightening liquidity. The 14-day average net position change for Bitcoin held in miner and mining pool addresses turned negative in early May and has stayed in the red since, a signal that liquidations or withdrawals from these addresses are persisting as operators fund ongoing operations or pursue balance-sheet adjustments. This dynamic adds a heavy drag on Bitcoin’s price discovery, even as macro factors attract other market participants.
The balance of power in hashrate distribution continues to tilt toward the industry’s largest players. The combined share of the three biggest mining pools—Foundry USA, AntPool, and F2Pool—stood at about 59% over recent seven-day data. That concentration marks a meaningful contrast with 2022, when the top three pools controlled roughly 44% of hashrate, highlighting ongoing centralization concerns in Bitcoin mining as efficiency, scale, and electricity access drive consolidation.
Beyond efficiency and access to cheap power, energy availability remains the gating factor for broader AI infrastructure expansion. Bernstein’s assessment has fed into a wider industry narrative that the bottleneck for AI data centers is electricity, a constraint that is pushing some miners to repurpose energy assets to support AI workloads rather than purely cryptocurrency mining. This pivot partly explains why perceived mining profitability may diverge from the performance of AI compute assets that are funded by the same energy resources.
From a cost perspective, analysts note that production costs for Bitcoin mining vary widely by operator and region. Charles Edwards, founder of Capriole Investments, has highlighted that the Bitcoin mining production cost—accounting for depreciation and amortization—hovers around $62,650 per BTC, while the minimum electricity cost to break even sits near $50,120. Some publicly listed operators contend with more favorable economics thanks to newer ASIC models and industrial-scale power contracts. For American Bitcoin Corp (ABTC US), management reported gross operational costs near $36,200 per BTC mined in Q1 2026, illustrating how scale and efficiency can compress unit costs even as overall price pressures persist. Still, there is no single industry-wide figure, and some miners continue to run at losses for reasons such as tax planning or strategic positioning. Even with high-cost operations temporarily idling, spot institutional flows now vastly outweigh mined BTC output, underscoring macro forces as a primary driver of ongoing price dynamics.
Earlier coverage noted a related tension: as institutional demand for spot BTC has grown, Bitcoin has sometimes acted as a broader market canary in the coal mine during risk-off episodes, underscoring how macro liquidity can trump individual mining economics in the near term. For readers tracking this topic, see ongoing coverage on how risk-off dynamics influence BTC supply and price behavior.
Looking ahead, the key watchpoints are clear. Electricity prices and access to low-cost energy will continue to shape mining economics and any meaningful reallocation toward AI compute. At the same time, macro demand for Bitcoin as a risk-on or risk-off diversifier, plus regulatory developments around mining operations and energy contracts, will influence how miners navigate profitability, capacity deployment, and balance-sheet resilience. Investors and industry observers should monitor these intertwined threads to gauge whether mining margins recover, or if the AI-infrastructure pivot becomes the more durable driver of capital allocation in the Bitcoin ecosystem.
Watch for updates on energy pricing trends, AI data-center capacity expansion, and policy shifts that could impact the economics of large-scale mining. As the landscape evolves, the balance between profitability, energy constraints, and macro demand will continue to define Bitcoin’s mining narrative.
Sources and data references include the Luxor Hashrate Index for hashing-power returns, Glassnode Studio for miner net position changes, and statements from Bernstein on AI-data-center bottlenecks. Public disclosures from Capriole Investments and American Bitcoin Corp provide cross-checks on production costs and operational expenses, while market observers on X highlighted current hashrate concentration dynamics. Related context from Cointelegraph pieces on institutional flows and AI infrastructure themes complements the analysis.
Source notes: Daily return per 1 TH/s — Luxor Hashrate Index; 14-day miner net position change — Glassnode Studio; AI infrastructure bottlenecks — Bernstein (via Cointelegraph); 1) Antminer S21 XP Hydro profitability — Luxor Hashrate Index; Capriole Investments commentary — Capriole on X; ABTC Q1 2026 costs — ABTC via PR Newswire; broader context on institutional flows and AI infrastructure coverage — Cointelegraph.
