Bitget App
Trade smarter
Buy cryptoMarketsTradeFuturesStocksEarnInstitutionAI & More
‘BTC’s security is lower now’ – Why miners are abandoning Bitcoin for AI

‘BTC’s security is lower now’ – Why miners are abandoning Bitcoin for AI

AMBCryptoAMBCrypto2026/01/20 16:03
By:AMBCrypto

The artificial intelligence (AI) boom and the demand for computing resources to train models offered Bitcoin miners a new lifeline amid declining miner rewards. 

Bitcoin miners such as Iren (Nasdaq: IREN), Applied Digital Corp (Nasdaq: APLD), and Hut 8 Corp (Nasdaq: HUT), repurposed their mining rigs for AI and reported massive share gains in 2025. 

‘BTC’s security is lower now’ – Why miners are abandoning Bitcoin for AI image 0

Source: Artemis 

But some miners are not only diversifying their operations but abandoning BTC and crypto mining altogether. 

Bitfarms (Nasdaq: BITF), for example, recently sold its Paraguay BTC mining plant to “reinvest in their North American HPC/AI energy infrastructure in 2026.” 

Another miner, Riots Platform (Nasdaq: RIOT), made an AI deal with AMD, fully funded by selling 1,080 BTC from its balance sheet. These actions and miner dumps fueled pressure on the crypto asset. 

Will AI pivot pressure BTC?

Besides, the overall mining sector has been struggling to stay afloat. Because mining costs have risen above the current Bitcoin [BTC] price. Hash Ribbon, the indicator that tracks this miner capitulation, was flagged in late November (red shades). 

It always forces miners to sell BTC to cover operational costs. 

‘BTC’s security is lower now’ – Why miners are abandoning Bitcoin for AI image 1

Source: Glassnode

Historically, the miner capitulation also tends to act as a bottom signal and good buying opportunity (white zones) if the 30-day average (green) crosses above the 60-day average (blue). 

Although such a shift was close and a firm structural rebound in BTC’s price is likely, the miner AI pivot also revealed another side of BTC that hasn’t drawn much attention. 

Each BTC halving event, the block rewards miners receive are reduced by half. In 2020, it was 6.25 BTC; after the 2024 halving, the rewards dropped to 3.125 BTC. And after the upcoming 2028 event, the new rewards will drop even further to 1.5625 BTC. 

Unless BTC’s value explodes higher, mining would be less lucrative in the future compared to AI returns. 

Will Bitcoin network security falter?

Amid this decline in rewards, transaction fees were meant to cover this shortfall. Collectively, block rewards and transaction fees are the security budget that keeps miners up and running to secure the network. 

However, as block subsidy drops and fees fail to give cover, the founder of VC firm Cyber Capital, Justin Bons, warned, 

“BTC’s security is lower now than it was 5 years ago! The security budget will keep falling until the network is attacked.”

‘BTC’s security is lower now’ – Why miners are abandoning Bitcoin for AI image 2

Source: Dune

Final Thoughts 

  • The BTC miners’ AI pivot and broader mining sector added pressure to the markets.
  • Although a market shift was close if the Hash Ribbon indicator cleared, the sustainability of BTC mining remained unclear. 

 

0
0

Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

Understand the market, then trade.
Bitget offers one-stop trading for cryptocurrencies, stocks, and gold.
Trade now!

You may also like

From connecting users to hosting computing power, Philippine telecom giant Globe bets on AI data centers! Targeting the next billion-dollar business.

Globe Telecom Inc. plans to invest at least $1 billion by 2027 to expand its data business. The company regards its data center business as the next billion-dollar venture, with the rapid development of artificial intelligence being a key driving factor behind this goal.

智通财经•2026/09/29 03:41

Quantum Computing Reaches Historic Turning Point: Moving Beyond "Physical Experiments," Supply Chain and Manufacturing Become Key to Success

After attending the Quantum World Congress, Jefferies issued a major evaluation: the industry's core challenge has shifted from "creating good qubits" to "building truly usable computers." The source of competitive advantage has fully moved from physics innovation to system engineering and manufacturing barriers. The U.S. government has elevated its role from a funding provider to a rule-maker, with federal funding now linked to performance and the NQI Act about to be implemented. Whoever first achieves repeatable manufacturing and supply chain resilience will earn the ticket to compete in commercializing this technology.

华尔街见闻•2026/09/29 03:26