The anticipated bull run following the 2025 halving has not materialized, leaving Bitcoin to face an exceptionally severe bear market. As the world's attention shifts to Artificial Intelligence (AI), Bitcoin is gradually fading from public view. The rise of AI has not only captured media headlines but also triggered a significant migration of capital.
Capital Flows Shift Dramatically Amidst AI Investment Frenzy
Venture capital data reveals that in 2025, AI startups secured a staggering $22 billion in funding, while the total financing for the cryptocurrency sector reached $30 billion. While the gap may seem narrow at first glance, it becomes starkly apparent when considering that a single $40 billion funding round for OpenAI (valuing the company at $300 billion) surpassed the entire year's funding for the crypto industry. This is not a subtle shift but a large-scale withdrawal of funds from crypto into AI. During this period, the Nasdaq index surged 60% driven by AI concept stocks, Nvidia climbed 40% in 2025 alone, and Google saw a 65% increase, while Bitcoin continued its decline.
The Energy Tug-of-War: AI vs. Bitcoin
Bitcoin's essence lies in energy conversion, transforming electricity into monetary value through "mining." Historically, abundant energy allowed countries and corporations to profitably engage in Bitcoin mining using surplus electricity, creating a win-win scenario. However, the advent of AI has completely altered this landscape. The rapid development of AI applications like ChatGPT, Gemini, Grok, and Claude has led to a surge in demand for AI computing power, suddenly highlighting a global energy supply shortage.
From an economic perspective, Bitcoin mining generates between $60 and $130 per megawatt-hour (MW) of electricity revenue. In contrast, AI colocation services can yield $200 to $500 in revenue. The Enterprise Value (EV) per MW for Bitcoin miners is approximately $4.5 million, whereas AI data centers boast an EV of up to $30 million. This immense economic disparity makes AI a far more attractive consumer of electricity than Bitcoin.
Miner Exodus: The Battle for Computing Power Has Begun
Bitcoin mining companies are acutely aware of this harsh reality. They possess vast warehouses equipped with efficient power infrastructure and have discovered that replacing Bitcoin mining rigs with AI servers can yield returns six to nine times greater.
Announcements have followed in quick succession: Core Scientific, post-bankruptcy, swiftly signed major AI colocation agreements and was acquired for $9 billion; Hut 8 inked a $7 billion AI deal with Google; and Cipher Mining reduced its Bitcoin hashrate by 51% and rebranded to focus on AI. Most astonishingly, a pivotal figure in the Bitcoin mining industry, Bitmain co-founder and hailed as the "godfather of Bitcoin mining," Jihan Wu, announced that his company, Bitdeer, would sell all its Bitcoin mining machines to fully transition to AI infrastructure. If even the foundational figures of Bitcoin mining are departing, it serves as a clear danger signal for the industry.
The Impact of Miners' Departure
While Bitcoin's algorithm adjusts difficulty based on the number of miners, theoretically making it more profitable for the remaining participants and enabling it to weather past bear markets, this time is different. The immense demand for energy and computing power from AI is fundamentally reshaping the Bitcoin mining ecosystem.