TL;DR
- Bitcoin mining profitability hits record lows due to declining crypto prices and soaring electricity costs.
- Mining difficulty is predicted to fall over 13%, the steepest drop since China’s 2021 mining ban.
- Major miners like IREN and CleanSpark report massive quarterly losses in the hundreds of millions.
Bitcoin mining profitability hit record lows as the industry faced a perfect storm of declining cryptocurrency prices and soaring electricity costs. Large mining companies powered down their machines across North America, with analysts predicting mining difficulty could fall more than 13% at the next adjustment. Such a drop would mark the biggest decline since China banned crypto mining in 2021.
Stock prices reflected the pain. On February 5, CleanSpark dropped 10%, Marathon (MARA) fell 11%, TeraWulf shed 8.5%, and Riot declined 4.8%. CleanSpark executive Harry Sudok described the downturn as historic, pointing to two main culprits: Bitcoin’s sharp price decline and severe winter storms across the United States.
Bad weather hit Texas and Tennessee hard in late January, sending electricity prices through the roof. Miners faced a choice: shut down unprofitable operations or participate in grid-balancing programs. Several companies responded by refitting data centers for artificial intelligence work. CleanSpark and TeraWulf both began transitioning capacity toward AI infrastructure, though bitcoin mining still generates most revenue.
Marathon made major moves during the downturn. According to Arkham Intelligence, the company transferred 1,317 BTC (roughly $87.4 million) to external wallets and exchanges. The largest transfer, 653.7 BTC worth $43.4 million, went to Two Prime, a digital-asset manager. Another 300 BTC went to BitGo, a custody provider, with the remaining amount dispersed to unidentified wallets.
Giants Face Massive Quarterly Losses
IREN, the largest public bitcoin miner, reported devastating results. Shares plummeted 11.5% during regular trading and lost another 13% after hours. The company’s revenue fell to $184.7 million against forecasts of $224 million. More shocking, IREN posted a net loss of $155.4 million, compared to a $384.6 million profit the previous quarter.
The loss stemmed largely from a $219 million revaluation of financial instruments and $31.8 million in equipment impairment. These charges reflected the planned shift of British Columbia data centers from mining toward AI computing. Co-founder Daniel Roberts noted strong demand for data-center services, signaling the company is reallocating resources toward more profitable AI workloads.
CleanSpark experienced even steeper declines. Share prices fell nearly 20% during trading, slipping another 10% after hours. Revenue reached $181.2 million, missing consensus by $13 million. The company reported a $378.7 million net loss against a $246.8 million profit one year earlier. Working capital stood at $1.3 billion as of December 31, 2025.
President Gary Vekkiarelli stated the business model is undergoing transformation. Mining generates immediate cash flow while AI infrastructure targets long-term growth. This approach mirrors moves by Bitfarms, which announced a gradual exit from mining in November, and Bit Digital, which flagged plans to cease mining entirely in January to focus on AI strategies.
