Bitcoin Mining Pushed Aside by AI, Is the World's Largest Computing Network Collapsing as It Is?

▲ Artificial Intelligence (AI) Agent, Bitcoin (BTC), Cryptocurrency Mining / ChatGPT Generated Image ©

A chilling warning has emerged that the leading virtual asset, which once boasted the world's most powerful computing power, could be swept away by the enormous trend of artificial intelligence (AI) and face a crisis of network collapse, drawing significant market attention.

According to crypto media outlet Bitcoinist on April 18 (local time), Charles Edwards, founder of Capriole Investments, recently diagnosed that the Bitcoin (BTC) mining industry is rapidly shifting its business to the artificial intelligence sector, causing the mining ecosystem to collapse at an unprecedented rate. This is because most major publicly listed mining companies, which consume vast amounts of electricity, are vying to shift their focus to high-performance computing-based artificial intelligence businesses.

Currently, AI accounts for an average of only 13% of the total revenue of major mining companies, meaning cryptocurrency mining is still the absolute primary revenue source. However, according to the long-term roadmaps announced by these companies, AI is expected to become a major revenue source between 2027 and 2028. Edwards predicted that the current 90% share of mining revenue will plummet to just 30% within the next two to three years.

This business structure transformation is evidenced by stark performance differences in the stock market. The stock prices of companies that boldly set their AI revenue share target at over 80% soared by an average of over 500%. In contrast, the stock price growth rate of companies that passively set their AI revenue target below 60% was only one-tenth that of the leading companies, and some even recorded negative returns over the past two years, facing thorough neglect from investors.

Signs of departure from major mining companies are leading to a decline in hashrate, the network's core defense mechanism. According to Blockchain.com data, the hashrate, which represents the total computational power connected to the network, has significantly decreased in recent months. While recent short-term price drops could be a cause, analysis suggests that the fundamental reason is a structural exodus of vast capital and infrastructure towards AI businesses. Edwards expressed concern that the ecosystem, once praised as the world's largest computing network, is rapidly being encroached upon by the AI boom.

Meanwhile, despite long-term concerns about seismic shifts in the mining ecosystem and weakened security, the price is maintaining a robust trend. Bitcoin is currently trading around $77,245, up 5.7% over the past 7 days, continuing a short-term rally contrary to immediate fundamental concerns.

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