Mining Industry in Transition: Between Solo Luck and AI Expansion

Mining Industry Between Extremes: Rare Windfalls and Strategic Realignment

The Bitcoin mining industry currently shows two contrasting faces: On one side are spectacular individual successes, where a solo miner hits the jackpot with minimal capital investment. On the other side, the professional mining industry is undergoing a fundamental transformation, with even major players completely liquidating their Bitcoin holdings. These developments illustrate how dramatically the mining landscape is currently changing – and what challenges the industry must overcome.

Both phenomena are more than mere footnotes: They reveal the extreme tensions in which mining operates today – between statistical outliers and economic survival pressure, between decentralized participation and industrial consolidation.

The Facts

An extraordinary case of solo mining recently made headlines: An independent miner validated block 938092 and received the full block reward of 3.125 BTC – approximately $200,000 at current rates. The twist: The miner invested only about $75 in rented hashrate of approximately 1 petahash per second (PH/s) through an on-demand service ^[1]. The operation was coordinated through CKPool, a platform that enables solo miners to submit block solutions while keeping the full reward.

However, such successes remain absolute exceptions. According to data analysis, only 21 solo miners successfully found blocks in the past twelve months – a total of approximately 66 BTC worth around $4.1 million. This corresponds to an average of one solo block every 17.2 days ^[1]. Compared to the thousands of blocks produced daily across the entire network, these successes are statistical outliers – comparable to lottery wins.

The success also occurred during a phase of considerable volatility in mining difficulty. After winter storms temporarily took hashrate offline in major mining regions, difficulty increased by about 15 percent to 144.4 trillion ^[1]. Previously, it had fallen by 11 percent – the steepest decline in network hashrate since China's mining ban in 2021.

While individual lucky winners succeed with small stakes, the professional mining industry presents a completely different picture: Bitdeer, now the world's largest mining company with 71 exahashes per second (EH/s) of managed hashrate, has sold its entire Bitcoin holdings ^[3]. At the beginning of last week, the company still held 943.1 BTC, plus 189.9 newly mined BTC. As of February 20, the balance stood at zero Bitcoin.

CEO Jihan Wu attempted to reassure in a statement: "Our decision to sell Bitcoin should not be a cause for concern for the broader market" ^[2]. The company is reviewing "several non-binding options for acquiring land with power potential" and considers it sensible to build liquidity now ^[3]. The hashrate will continue to rise and the company will "continue to mine more Bitcoin in the interest of our shareholders."

Bitdeer thus joins a broader trend: Several mining companies have reduced Bitcoin holdings in recent weeks to finance their expansion toward artificial intelligence (AI) and high performance computing (HPC). Riot Platforms sold 1,080 BTC in mid-January to acquire additional land – as part of a 10-year deal with chip manufacturer AMD ^[3]. Cango reduced its Bitcoin holdings from 8,096 to 3,645 BTC to finance its AI pivot and pay down debt ^[3].

Bitdeer itself raised over $300 million on February 20 through the issuance of convertible bonds to restructure debt and expand its AI cloud and HPC business ^[3]. With Bitcoin trading around $64,800, mining companies are under considerable pressure as their revenues decline while fixed costs remain high ^[2].

Analysis & Context

The two developments – spectacular solo mining successes and systematic BTC sales by large miners – illustrate a fundamental shift in the mining industry. On one hand, the ability to rent hashrate theoretically democratizes access to mining. In practice, however, solo successes remain pure chance with vanishingly low probability. The dominance of large mining pools remains unbroken – and is likely being further strengthened by current consolidation.

The systematic sale of Bitcoin holdings by large miners marks a departure from the treasury strategy pursued by other companies like Strategy or MARA Holdings. While Strategy bought more Bitcoin last year than all mining companies combined hold ^[3], others are liquidating their holdings for operational purposes. This divergence shows: Mining companies face fundamental strategic decisions. Should they act as Bitcoin accumulators or as operational infrastructure providers that deploy their assets flexibly?

AI expansion is the decisive factor here. Mining data centers possess infrastructure and energy capacities that are also suitable for HPC applications. In times of high difficulty and moderate Bitcoin prices, diversification toward AI can be more economically viable than pure Bitcoin mining. Star investor Michael Burry's warning of a possible "death spiral" below $50,000 Bitcoin ^[3] may be exaggerated – but it shows the real economic constraints facing the industry.

Nevertheless, the significance of these sales should not be overstated. Bitdeer's 1,132.9 BTC barely registers in the overall context – Strategy alone regularly purchases larger amounts ^[3]. The network hashrate near all-time highs also signals: The Bitcoin network itself is not threatened by these developments. Consolidation in the mining industry is a natural process that Bitcoin has gone through several times before – for example, after the China ban in 2021 or previous halving cycles.

Conclusion

• The mining industry is undergoing a phase of fundamental realignment: While solo mining becomes theoretically more accessible thanks to rented hashrate, it statistically remains a lottery with vanishingly low probability of success

• Large mining companies are systematically diversifying toward AI and HPC, leading to Bitcoin sales – however, this is primarily a business optimization and not a loss of confidence in Bitcoin itself

• Sales by mining companies like Bitdeer have only limited market impact, as the volume remains manageable compared to institutional buyers like Strategy

• Consolidation of the mining industry is a natural process during moderate Bitcoin prices and high difficulty – the Bitcoin network itself remains robust, as evidenced by hashrate near all-time highs

• Investors should distinguish between short-term headlines and structural trends: The transformation of the mining industry reflects economic adjustments, not the fundamental health of the Bitcoin network