The Bitcoin network saw its 20 millionth BTC mined this week, leaving just 1 million coins left to be paid as rewards to miners.
That doesn’t necessarily mean the Bitcoin mining industry will look the way it does for the next century. John Todaro, a managing director and senior research analyst at Needham & Company, expects many publicly traded miners to exit Bitcoin mining in 2027 and 2028.
“We believe a large portion of the public Bitcoin miners will sell down nearly all of their Bitcoin holdings before year-end 2026 as they embark on [capital expenditure] spend related to AI workloads,” he wrote in a recent note shared with Decrypt. In other words, Bitcoin mining companies are pivoting to AI.
And it’s easy to see why, he added.
“Stubbornly low hash price combined with the upcoming 2028 halving presents a concerning environment for Bitcoin mining operations,” he told Decrypt. “Many operators are at or near breakeven costs today, while NOI margins in HPC are north of 80%.”
NOI refers to net operating income, which measures revenue minus operating expenses, excluding financing costs and taxes. So it stands to reason that mining firms are adjusting their revenue split to favor better margins.
Ross Gan, the chief communications officer at Bitdeer, told Decrypt the firm has Bitcoin’s technological infrastructure in its DNA.
“The miners that endure will be the ones that control more of the stack themselves. We demonstrate how that matters by designing and deploying our own high-efficiency ASICs and securing long-term energy capacity worldwide,” Gan said. “Vertical integration has proven to be one of the clearest markers of long-term survivability.”
He added that up until recently, Bitcoin has been treated as a key monetization engine that was complemented by AI infrastructure to keep long-term revenues stable.
“That duality may no longer be a nice-to-have in the future,” Gan said.
HIVE Digital Technologies, formerly HIVE Blockchain, was founded in 2017 and went public later that year on the Toronto Stock Exchange. The company began investing in high performance computing, or HPC, infrastructure much earlier than many of its competitors. So early, in fact, that it was still generating revenue from Ethereum mining when Executive Chairman Frank Holmes mentioned it on an earnings call.
“The Ethereum mining margins that we experienced during the quarter enabled us to continue the upgrade of our data center assets in Sweden and Iceland and also diversify our business by starting to invest in HPC assets,” he said in November 2021.
The Canadian company has built its business around finding creative ways to source power from hydro-electric and otherwise stranded energy, Holmes told Decrypt.
“Bitcoin miners have led the world in sourcing stranded and surplus energy and in building Tier I power infrastructure at scale,” he said. “There is enormous energy abundance in the world, especially in hydro-rich regions like South America and Canada, but the winners will be operators that can secure it at low cost, structure around it intelligently, and turn that energy into durable computing infrastructure.”
“Block rewards will decrease, but that does not mean the industry will disappear. It means the bar rises,” he added. “The miners that survive will be the ones with the best power, the best sites, and the most flexibility.”
But what happens to the price of Bitcoin when block rewards get all the way to zero? Investors have known that Bitcoin has a finite supply since its inception, so theoretically it’s priced in.
The global gold supply hasn’t been exhausted yet, so investors can’t skip ahead a few chapters for a preview of what BTC might do in 115 years. But Todaro pointed out that the very gradual reduction in block rewards should dampen effects on Bitcoin’s price.
He expects the majority of selling pressure to come from newly produced BTC, not long-time HODLers. And even if Bitcoin miners liquidate their holdings as they exit the business, they’re not the whales they used to be.
