The economics of Bitcoin mining have deteriorated to the point where listed miners are paying to exit the sector entirely, according to the latest quarterly analysis from CoinShares.

In Q2 2026, the average ex-tax cash cost of producing one bitcoin across covered miners reached approximately $75,500, while bitcoin ended the quarter at $58,400 — less than half its October 2025 all-time high. The monthly average hash price fell to an all-time low of $27.7 per PH/s/day in June, pushing the sector below cash breakeven in aggregate.

Against that backdrop, the appeal of artificial intelligence is straightforward. CoinShares estimates that AI compute generates roughly $1.5 million in annualized profit per megawatt for miners — approximately three times the $0.5 million per MW that bitcoin mining currently produces. That gap helps explain a wave of decisive corporate moves during the quarter.

Core Scientific paid $41.9 million to cancel 15 EH/s of next-generation mining hardware, described as the most efficient chips ever produced, while management confirmed that its remaining rigs operate solely to offset contractual power obligations. Keel ceased mining entirely on 29 June and will report zero mining revenue in Q3, becoming the first listed miner to reach that point. IREN stated that its exit will be substantially complete by year-end, and Cipher Digital indicated it will likely be out of mining by end-2027. Several companies, including Keel and Cipher, sold down bitcoin reserves at losses to fund data center construction for tenants.

The network itself reflects the exodus. Bitcoin's hashrate fell approximately 27% from its October 2025 peak to 850 EH/s by February 2026 — the first six-month decline since China's 2021 ban — and currently sits around 50% below the historical trend line, a depth consistent with prior post-halving capitulation phases.

Bitcoin mining economics came under heavy pressure in Q2, while demand for the power infrastructure miners already control continued to grow. Luke Nolan ( @eazygambit ) looks at how listed miners are responding, and what it means for the sector in our Q2 2026 @Bitcoin Mining… pic.twitter.com/au1rR0tn0O
— CoinShares (@CoinSharesCo) September 16, 2026

Regulation Reshapes Valuation, but Execution Looms

A structural constraint is accelerating the repricing of mining infrastructure. At least 225 data center moratoriums or restrictions have been recorded across 30 US states, 151 of which remain in force, and New York enacted the first statewide pause in July 2026.

Meanwhile, the US interconnection queue stands at roughly 2,600GW — more than the country's entire installed capacity — with median wait times exceeding five years. Projects with completed permits are typically grandfathered, making existing energized sites effectively unreplicable assets. A recent transaction valued leased AI facilities at approximately $27 million per MW, versus below $3 million per MW for some miners' unleased energized capacity.

The market has already priced in the transition. Companies with contracted AI or HPC capacity trade at an average of 12.9x EV/NTM sales, compared with 3.7x for continuing miners without contracts. Keel is a notable exception at 18.3x despite having no signed tenant.

However, more than $100 billion of disclosed contract backlog currently supports only around $1.1 billion of annualized AI/HPC revenue, with roughly 550MW billing against more than 4GW contracted. The implication for investors is that the premium has been priced in while the revenue has not yet materialized. Companies that convert capacity on schedule should see multiples compress as revenue catches up; delays would leave current valuations increasingly difficult to justify. The clearest near-term measure of that conversion is the gap between contracted capacity and billing, alongside progress on permits and energized megawatts.