Author: Nancy, PANews

Nowadays, mining companies abandoning cryptocurrency for AI has become commonplace.

Recently, major listed mining company MARA has massively sold off Bitcoin, signaling that transitioning to AI is no longer a precautionary option but a critical necessity for survival.

Massive sale of $1.1 billion in cryptocurrency, MARA expands AI business

On March 26, MARA disclosed that from March 4 to March 25, it sold a total of 15,133 Bitcoins, generating approximately $1.1 billion in revenue. This part of the funding will be used to strengthen its balance sheet and provide greater strategic flexibility for expansion into digital energy and AI/HPC sectors.

Earlier this month, MARA preemptively warned the market by adjusting its treasury strategy from "only selling the current year's mined output" to "selling accumulated Bitcoins on the balance sheet." This sale has caused MARA to drop from being the second-largest company ranked by holdings among listed miners, just behind Strategy, to third place. Currently, MARA still holds nearly 38,700 Bitcoins, with its holdings returning to the levels of December 2024.

Although MARA emphasized it does not plan to liquidate the majority of its Bitcoins, the scale of the reduction reflects that mining companies are facing increasing cash pressure, stemming from the prolonged slump in Bitcoin mining business.

According to the latest report from CoinShares, Bitcoin miners are facing severe profitability challenges, with the hash price dropping to about $28-30 per PH/s/day in Q1 2026, marking a new low since the halving. Meanwhile, the weighted average cash cost for Q4 2025 reached approximately $80,000 per coin, with about 15-20% of mining machines worldwide operating at a loss. VanEck recently revealed that the total balance of miners (excluding Satoshi's wallet) is approximately 684,000 BTC, a year-on-year decline of about 0.5%, during which about 164,000 new BTC were mined, meaning that miners have effectively sold all new production in the past year.

This data clearly shows that the mining business has become increasingly unprofitable. Moreover, MARA's early expansion relied on the S19 series of mining machines, which severely compressed profit margins, but over the past two years, it has gradually upgraded to more efficient models.

AI Transformation Becomes a Necessary Choice for Mining Companies

In response to mining pressures, MARA is accelerating its AI layout.

Earlier this year in February, MARA announced a partnership with Starwood Capital Group's Starwood Digital Ventures to convert and expand some U.S. sites originally used for Bitcoin mining into data centers aimed at enterprise cloud and artificial intelligence clients. Starwood is one of the most representative real estate investment firms in the United States and has heavily invested in digital infrastructure in recent years, forming one of the world's leading private data center portfolios.

In fact, MARA CEO Fred Thiel proposed as early as 2024 that successful Bitcoin miners will integrate AI components long-term, using low-cost energy to serve AI data centers, with hopes that within four years, 50% of revenue will come from non-Bitcoin mining businesses.

This year, MARA also began laying out an AI infrastructure transformation, using its electrical resources and data center spaces accumulated from Bitcoin mining to shift towards high-performance computing (HPC) and AI data centers.

In January this year, Fred Thiel stated in an interview that data centers and Bitcoin mining sites are both vying for the same scarce resource, which is reliable power and its associated infrastructure, and land, power, and operational control will determine who can scale up. He also warned recently that the industry is becoming increasingly brutal, and only mining companies that secure low-cost, reliable energy or adopt new business models will survive. Bitcoin mining companies must control power resources, or they will likely face elimination before the next halving. By 2028, mining companies will face three options: become power producers, be acquired by power producers, or collaborate with them.

Today, large mining companies, including MARA, Bitdeer, and Core Scientific, are advancing AI infrastructure businesses and significantly liquidating Bitcoin reserves to support their transformation.

According to Coinshares, listed mining companies have cumulatively announced more than $70 billion in AI/HPC contracts, and by the end of 2026, up to 70% of revenue for listed mining companies may come from AI. At the same time, valuations for mining companies are showing significant differentiation, with mining companies securing HPC contracts having an EV/NTM revenue multiple of 12.3 times, while pure mining companies stand at 5.9 times, indicating that the industry has split into infrastructure companies and mining companies, each with vastly different prospects.

AI transformation has become a necessary choice for mining companies, but the high costs of renovation and hardware expansion make this new arms race costly, forcing mining companies to liquidate their assets to alleviate short-term pressures.

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