Three months ago, we examined how public bitcoin miners were beginning to dismantle or repurpose mining fleets for AI and high-performance computing infrastructure.
At the time, the system remained roughly balanced.
The second-quarter earnings suggest that balance is beginning to break.
The miners reducing bitcoin exposure continued to unplug machines, but fewer operators expanded enough to compensate. At the same time, colocation revenue rose sharply among the companies furthest along in their conversions.
Core Scientific generated $136.7 million of colocation revenue in Q2, almost five times its $27.5 million of bitcoin mining revenue. Colocation supplied 83% of quarterly sales, up from 67% in Q1, according to the company’s second-quarter results.
TeraWulf followed the same trajectory. HPC lease revenue increased to $31.9 million, or 71% of total revenue, compared with $12.8 million from bitcoin mining. Its HPC share had already reached 62% in Q1 as contracted capacity at Lake Mariner began generating revenue.
For several miners, colocation is becoming a material contributor. At Core Scientific and TeraWulf, it has already overtaken mining.
The offsets are no longer keeping upUsing an expanded cohort and updated network series, TheEnergyMag estimates that the public miners tracked for this analysis produced a combined realized hashrate of 368.3 EH/s in Q4 2025, 344.4 EH/s in Q1 2026 and 319.0 EH/s in Q2.
That represents a 13.4% decline in six months.
The Bitcoin network’s quarterly average fell from 1,071 EH/s to 993 EH/s and then to 957 EH/s over the same period, a 10.6% reduction. The public company cohort therefore contracted faster than the network.
In Q1, expansion by a handful of miners largely obscured the scale of the shutdowns elsewhere. By Q2, even those additions were no longer sufficient to keep the cohort stable.
Bitdeer remained the largest offset. Its realized hashrate increased 44% from Q4 to Q2, reaching 63.0 EH/s. Excluding Bitdeer, the rest of the cohort’s realized hashrate fell 21.2%, from 324.6 EH/s to 255.9 EH/s.
Bitdeer’s expansion comes from its own SEALMINER production pipeline. By June, the company reported 73 EH/s of self-mining capacity and 15.9 EH/s of co-mining capacity. It produced 990 bitcoin during the month, 388% more than a year earlier.
Cango provides the sharpest example of how quickly mining economics have changed.
The company entered bitcoin mining in late 2024 and reached 50 EH/s of deployed capacity during 2025, only to begin decommissioning inefficient machines, leasing out hashrate and moving capacity toward lower-cost regions.
Its realized hashrate fell from 44.8 EH/s in Q4 2025 to 31.3 EH/s in Q1. TheEnergyMag estimates its Q2 capacity would decline to 16.5 EH/s—a 63% reduction in six months.
Keel Infrastructure has taken the transition further. During Q2, it completed the decommissioning of all U.S. bitcoin mining operations in preparation for data center construction. Mining continues in Canada during the phased transition. Meanwhile, the replacement revenue has not yet arrived.
The post-China arms race unwindsThe longer-term context also looks more striking after Q2.
China’s 2021 mining ban briefly removed roughly half the Bitcoin network’s computing power. Hashrate bottomed at 57.5 EH/s in June 2021, but miners relocated and the network had almost fully recovered by December. The United States emerged as the largest mining hub.
That recovery helped trigger the institutional expansion race TheEnergyMag has tracked over the ensuing years. Public miners raised capital, acquired power sites and ordered successive generations of ASICs, eventually pushing the network beyond one zettahash per second.
Only one halving has occurred since that expansion began.
Now, machines and electrical infrastructure accumulated during the post-China race are being idled, impaired or depreciated faster so their power can be reassigned to GPUs. The industry collectively expanded at enormous cost, only for some of its most visible operators to begin dismantling that capacity after one halving cycle.
Unlike the China ban, the current contraction has no single headline trigger. It is a combination of weak mining economics and a competing use for capital and electricity.
