A clear tension is building in Bitcoin’s mining sector, where growth in activity no longer translates into financial stability.
According to CoinShares Q1 2026 report on Bitcoin mining, Hashrate held near 1,020 EH/s after peaking around 1,160 EH/s, showing miners continue expanding despite pressure.
However, hashprice has dropped to $30–$35 from over $60, cutting revenue per unit sharply. This happens because the halving reduced block rewards while the price has not risen enough to offset costs.
As a result, production costs near $80,000–$88,000 exceed current prices, leaving losses of $17,000–$19,000 per BTC.
Meanwhile, accounting rules amplify these losses through asset revaluation. This implies weaker miners may exit, while stronger players consolidate, tightening supply and influencing future price stability.
Bitfarms growth rises as accounting losses widen
As mining margins tighten across the sector, Bitfarms’ report results reveal how operational growth clashes with financial outcomes. Revenue rose 72% to $229 million, showing stronger output from expanded hashrate.
However, net losses widened to around $209 million, not from weak operations but from accounting pressure.
Depreciation hit $98 million, impairments reached $28 million, while $22 million reflected BTC price swings. This happens because fair-value accounting captures past volatility, even as current production improves.
Meanwhile, hashprice kept margins compressed, limiting cash generation.
Yet shares rose about 6%, showing investors’ focus on future positioning. This implies markets expect miners to evolve beyond BTC exposure, where diversification could reshape long-term valuation.
Bitfarms pivots to HPC and AI as mining margins compress
As mining margins remain under pressure, Bitfarms is actively repositioning its business toward HPC and AI infrastructure to secure more stable revenue. The company is building a 2.2 GW pipeline, with 341 MW already active and 1.5 GW in expansion, targeting high-demand data markets.
This shift is happening because hashprice stays compressed, making mining returns less predictable.
In response, Bitfarms is redirecting power capacity toward AI workloads, where long-term contracts offer higher margins and steady cash flow.
Industry trends support this move, with HPC revenue projected to reach 70% of miner income by 2026. The rebrand to Keel Infrastructure reinforces this transition.
This implies Bitfarms is evolving beyond Bitcoin exposure, positioning for more resilient, infrastructure-driven growth.
All this together, Bitfarms may reprice as an infrastructure play if HPC and AI drive stable revenue growth. However, if mining remains dominant, BTC volatility will continue shaping earnings, keeping the stock tied to cyclical crypto movements.
Final Summary
- Bitcoin [BTC] mining margins compress as hashprice falls below costs, forcing weaker miners out while efficient players consolidate supply dynamics.
- Bitcoin volatility still drives Bitfarms’ performance, but the HPC and AI pivot may shift valuation toward stable, infrastructure-led growth.
