Why aren't miners panicking

Written by: Coach Liu

Waking up, Bitcoin has once again fallen back to the 67K level.

Recently, life has been tough for Bitcoin miners. Each mined BTC results in a loss of $19,000, and miners are experiencing a historic mass exodus. This isn’t the end of the market, but rather the most brutal and sophisticated self-purification of the PoW mechanism.

According to on-chain data, miners lose an average of $19,000 for each Bitcoin mined. Production costs are around $88,000, while Bitcoin prices hover below $69,000. This over 20% gap is like a sword hanging overhead, forcing miners to choose: keep holding on and wait for dawn? Or shut down their machines and leave in regret?

Bitcoin network difficulty has decreased by 7.8% over two weeks, which is the most honest signal—someone can’t hold on anymore and is shutting down. Just like soldiers falling in droves on the battlefield, we know the fight has entered its most brutal phase.

This scene feels familiar.

In 2018, Bitcoin dropped from $20,000 to just over $3,000, and miners lost everything, with difficulty plunging 15%. In 2021, after the China crackdown, hash rate halved overnight, and difficulty plummeted 25%. Every time, people shouted that Bitcoin was doomed, but each time, Bitcoin survived and thrived even better.

This time is different.

Previously, losses were caused by price crashes, and enduring them was possible. But this time, Bitcoin’s price remains in a historical high zone—cost structures have issues—energy costs have risen, equipment is more expensive, operational costs are higher. Waiting for prices to rebound may no longer save everyone.

More importantly, in this crisis, miners have gained a new card: AI computing power.

Names like Hut 8 and Bitfarms are increasingly appearing in news about AI computing rentals. They are shifting their clusters from mining to model training, transforming data centers that consumed electricity into printing presses for computing power. With the same electricity costs, AI computing rentals could yield twice the revenue of mining. The temptation is enormous.

Some joke that miners are switching careers to become programmers. But it’s not that simple. Transitioning from ASIC miners to GPU clusters, from mining software to PyTorch, from joining mining pools to connecting with cloud service providers—this is a complete transformation. It requires technical skills, talent, and patience.

But fundamentally, this path doesn’t deviate from Satoshi’s blueprint.

As I mentioned in previous articles, the beauty of PoW (Proof of Work) lies in its construction of an almost insurmountable barrier through massive, unchangeable capital investment. Every penny miners spend, every kilowatt-hour consumed, ultimately becomes part of Bitcoin’s value. Those shouting that Bitcoin is just air may never understand why a seemingly intangible digital asset can be worth so much. The answer lies in those roaring mining machines, towering cooling towers, and the consumed, irretrievable energy.

This is the core of Satoshi’s economics: using physical world costs to anchor the value of the digital world.

From this perspective, the AI transition isn’t a betrayal but an evolution. When miners allocate some of their hash power to serve the AI market, they’re not abandoning PoW but giving hash power capital greater flexibility. This could make the entire mining community healthier and more resilient to price fluctuations.

But everything has a cost.

As many small and medium miners exit, hash power will further concentrate among large mining companies. The combined hash rate of the top two pools, Foundry USA and AntPool, once exceeded 51%. While this doesn’t necessarily mean they will launch a 51% attack—doing so would be like killing the goose that lays the golden eggs—such concentration itself erodes the ideal of decentralization.

What is the essence of decentralization? It’s not technology or code, but the dispersal of power. Satoshi created the PoW mining community to balance the power centers of hash rate and capital. If one day, miners disappear or become mere appendages of capital, Bitcoin’s robustness would be seriously questioned.

So, the current situation is quite interesting.

On one side, PoW’s brutal purification eliminates inefficient players, making the industry healthier. On the other side, power is re-concentrating, testing the ideal of decentralization. The AI transition acts like a shot of confidence for miners, giving them more chips to survive future battles.

Looking back, miners kneeling below $60,000 may be signals of a market bottom. When even those closest to production start panic-selling, it’s often the moment to be greedy. Of course, this is “often,” not “always.”

But one thing is certain: this crisis isn’t the end of Bitcoin but a necessary step toward industry maturity. It will weed out the most cost-efficient and strategically flexible players, enabling them to thrive in the next cycle.

For us ordinary observers and participants, instead of succumbing to panic, it’s better to read Satoshi’s paper, think about the essence of PoW, and understand what Satoshi’s economics are really about. Once you truly understand these, you won’t be easily scared by noise about zeroing out.

The foundation of Bitcoin has never been a specific number but built from the faith, capital, and sweat of countless people. As long as that foundation remains, Bitcoin remains. Those who sell at the bottom and panic out probably will never understand why they always sell just before the price rises.

So, miners have bowed—don’t panic. Those who need to bow will eventually bow. Those who are meant to stay will stay.