Bitcoin is experiencing an unprecedented hashrate decline, with leading mining companies shifting their focus from Bitcoin mining to artificial intelligence (AI) and high-performance computing (HPC) infrastructure, according to Rapha Zagury, CEO of Twenty One Capital.
Public miners pivot from Bitcoin to AI
Speaking at Bitcoin Asia 2026 in Hong Kong, Zagury stated that nearly all publicly listed mining firms are now redirecting their capacity toward AI and HPC rather than continuing to mine Bitcoin at a large scale. Twenty One Capital is an asset manager and treasury platform focused on digital assets, backed by Tether.
He explained that this marks a significant departure from previous cycles. In the past, downturns in mining typically saw companies reposition hardware to new regions or wait for conditions to improve. Now, miners have alternatives due to increased demand for AI and HPC workloads, making it possible to utilize their infrastructure for non-Bitcoin operations.
Zagury traced the origin of the current downturn to late last year, when the Bitcoin network’s total hashrate peaked at nearly 1.3 zettahashes before starting a sustained decline that has yet to fully recover.
ETH
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AAPL| Period | Network Hashrate | Mining Firm Activity |
|---|---|---|
| Late last year | ~1.3 zettahashes (peak) | Full-scale BTC mining |
| Present | Below peak, ongoing decline | Shift to AI and HPC |
He emphasized that this is the longest recovery period from an all-time high in hashrate the Bitcoin network has ever faced.
He observed that, compared to the quick rebound after China’s 2021 mining ban, the current cycle is characterized by an exodus from Bitcoin mining due to new, more lucrative infrastructure opportunities in AI and high-performance computing.
Zagury explained that, unlike the 2021 incident, when mining hardware was relocated and the network bounced back in a matter of months, today’s miners are exiting altogether or sustaining only limited Bitcoin operations as they repurpose facilities.
Mining flexibility, business economics, and energy use
Addressing common criticisms about the sustainability and profitability of Bitcoin mining, Zagury said the business is fundamentally tied to cost efficiency and the ability to adapt. He acknowledged that several mining companies failed in the past due to poor cost management rather than external market factors.
He described Bitcoin as resistant to oversupply because its algorithm adjusts mining difficulty to keep block production near ten minutes, regardless of total hashrate. This contrasts with commodities such as oil, where prices directly influence supply.
Zagury drew on his experience from a project in Manicoré, a remote town in the Brazilian Amazon. There, he saw firsthand how limited access to electricity impacts basic living standards, emphasizing that energy access underpins development.
He highlighted the unique flexibility of mining operations, noting that mining farms can be powered on or off almost instantly, making them valuable assets for grid management and load balancing.
According to Zagury, this operational flexibility allows miners to support electricity grids while also opening revenue streams in the expanding fields of AI and HPC.
Mini dictionary: High-performance computing (HPC) refers to the use of powerful computers and networks to carry out complex calculations at high speed, supporting research, AI, and data-intensive tasks.
Reflecting on energy access in remote regions, Zagury remarked, “Energy is the substrate of everything that we call development.”
He concluded that, while Bitcoin mining faces structural changes, its adaptability and ability to stabilize power grids will remain a key part of its value proposition. Nevertheless, he believes these advantages are not yet fully recognized in investors’ assessments of mining companies.
