Bitcoin network experiences record energy consumption, prompting miners to explore AI solutions.

• In the past seven days, the network hash rate of Bitcoin hit an all-time high while the cryptocurrency rose more than 12%.
• Bitcoin mining has become increasingly challenging to generate profits.
• Core Scientific, a leading publicly traded miner, has satisfied Wall Street by shifting its focus to artificial intelligence and high-performance computing.

It was a week of extremes for enthusiasts.

The cryptocurrency experienced a 12% increase in value over the past week, and its network hash rate reached an unprecedented high. The hash rate measures the total computing power of all miners in the Bitcoin network, indicating a surge in the number of miners actively securing the network.

The mining business is becoming increasingly unprofitable, according to a report by investment bank Jefferies. The average daily revenue per exahash, or income per miner, decreased by 11.8% from the previous month, Jefferies stated.

With the increasing acceptance of bitcoin as a mainstream part of the economy, the days of easy money seem to be in the past. Since the SEC approved spot bitcoin exchange-traded funds in January, institutional capital has poured in, and the bitcoin network has become more robust than ever, thanks to a vast and decentralized network of miners securing transactions with the help of large banks of machines.

More individuals and their potent devices are competing for smaller incentives.

The bitcoin code halved new issuance of the world's largest cryptocurrency in April, a process that happens roughly every four years to increase scarcity. This event typically leads to a wave of bankruptcies among bitcoin mining firms, as they generate significantly less revenue with the same level of operating costs.

Bitcoin miners are getting hammered by Wall Street.

In 2024, the price of ethereum has fallen nearly 30%, while the price of bitcoin has risen about 44%.

In August, North American publicly traded mining firms produced a smaller percentage of new bitcoin compared to July, amounting to 19.9% of the total network. Despite investing in equipment upgrades, their efficiency is improving but their economics are deteriorating.

Due to the upgrade cycle, machines can now hash twice as much as previous models while using the same amount of energy, according to Marathon CEO Fred Thiel.

Thiel stated that there is no need to add new sites or power, only to upgrade existing systems.

Despite the difficult economic climate, Riot CEO Jason Les remains optimistic about the future of bitcoin. He believes that bitcoin is the most reliable form of currency globally and that low-cost mining is a practical way to gain exposure to it.

Companies that emerged from bankruptcy, such as , are using their massive infrastructure to power artificial intelligence and high-performance computing (HPC).

Core announced an expanded $6.7 billion deal with Nvidia-backed startup CoreWeave, which uses GPUs for running AI models.

In a recent note, Bernstein identified Core Scientific as the top-performing publicly traded bitcoin miner, highlighting that among the miners that have expanded into AI and HPC, Core is the only one with a significant co-location agreement with a leading GPU cloud provider.

Since its return to the stock market, Core's value has more than doubled, resulting in a market cap of approximately $3 billion.

Adam Sullivan, CEO of Core, informed CNBC that their facilities were designed to be versatile for both bitcoin mining and the current transition to high-performance computing.

If Core fully utilizes its 700 megawatt capacity for AI and HPC, it will become the third-largest data center company in the U.S.

"According to Sullivan, the real opportunity for capturing a significant portion of the data center market lies in the next three years. The largest niche that has ever been discovered in the data center industry is currently being carved out by bitcoin miners."

— CNBC's Talia Kaplan and Jordan Smith contributed to this report.

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