February 11, 2026 marks the coldest moment for the Bitcoin mining industry since the collapse of FTX.
According to Gate market data, BTC/USDT is currently priced at $66,680.4, down 3% over the past 24 hours. Behind this figure lies a set of production ledgers suffocating miners: the average all-in production cost for one Bitcoin across the network is about $87,000—roughly 45% higher than the current market price.
This is the first time since the 2022 bear market that Bitcoin mining has experienced widespread, systemic "underwater operations." On-chain analytics firm CryptoQuant has clearly defined the current stage as the "Capitulation Phase."
Inverted Ledgers: Losing $20,000 for Every BTC Mined
Rewind to October 2025, when Bitcoin hit an all-time high of $126,000. At that time, miners scrambled for every coin, and network hash rate soared as competition intensified. Yet just four months later, the price has dropped over 50% from its peak, lingering in the $60,000 range.
While prices have been slashed in half, costs have continued to climb. With the cumulative increase in Bitcoin network difficulty in 2026 and declining efficiency of older mining rigs, the current average fully diluted production cost per Bitcoin has surged to $87,000.
This means that even without factoring in facility maintenance and labor costs, miners are losing nearly $20,000 on paper for every Bitcoin produced. Such a severe cash flow inversion is beyond what even the most efficient operations can offset.
A key industry barometer—the "Miner Profitability Sustainability Index"—has dropped to 21. The interpretation is stark: except for a handful of leading players with ultra-low electricity contracts below $0.05 per kWh and fleets of the latest high-efficiency rigs, the vast majority of miners have seen their profit margins crushed into negative territory.
Hash Rate Exodus: 11% Difficulty Adjustment Fails to Stop Shutdown Wave
The most direct result of miner capitulation is a significant drop in network hash rate.
Compounding this, major North American mining hubs—especially Texas—have been hit by rare, severe winter storms, forcing some mining farms to limit power usage to protect residential supply. Under the dual pressure of voluntary miner exits and forced power curtailments, the network triggered a historic difficulty adjustment on February 9, with a sharp reduction of about 11%.
However, this is a "late and insufficient" painkiller. While an 11% difficulty cut does lower the mining threshold to some extent, it does little to offset the 45% price-cost inversion. The fix is a drop in the bucket.
For mid- and lower-tier mining farms paying more than $0.05 per kWh, or companies still running older S19 series rigs, this difficulty adjustment is nowhere near enough to reverse the financial risks of a complete shutdown. The hash rate market is still undergoing a painful shakeout.
Mining Stocks Plunge Over 20% as Capital Flees Risk
Wall Street’s capital instincts are even sharper than hash rate adjustments.
Amid worsening mining fundamentals and continued pressure on the Bitcoin price, US-listed mining companies faced a broad sell-off this week. Leading miners like MARA Holdings and Riot Platforms both saw their stock prices drop more than 20% this week.
Take MARA as an example: its share price has pulled back sharply from its 2025 high, closing at $7.66, with its price-to-book (P/B) ratio falling to 0.56x. This reflects the market’s deep pessimism toward the "pure mining" business model.
Capital flows clearly show a flight to safety: large sums are exiting high-volatility crypto assets and returning to traditional safe havens like gold.
From "Miners" to "AI Compute Landlords"
Facing what the industry is calling the "2026 Mining Winter," leading companies aren’t waiting idly for a Bitcoin price rebound. A sweeping "AI transformation" strategy is rapidly taking hold within the mining sector.
The logic is simple: mining farms are essentially large-scale, low-latency data centers with ready access to power, cooling, and rack space. While these resources are cost burdens during a Bitcoin bear market, in an era of generative AI and high-performance computing (HPC) shortages, they become scarce assets.
IREN and Core Scientific have already begun redirecting portions of their data center power capacity to support generative AI services, signing long-term contracts that deliver much more stable cash flows than mining.
Bitfarms has taken the most decisive step. The company recently announced a complete exit from Bitcoin mining, shifting its entire strategic focus to AI. Once one of the largest pure-play miners, it is now shedding the "Bitcoin" label.
Another mining company, Cango, sold 4,451 Bitcoins on February 9, raising $305 million at an average price of about $68,524—all earmarked for its transition to AI infrastructure. In a letter to shareholders, the company stated that the move aims to "strengthen the balance sheet and reduce financial leverage" to support the strategic expansion of GPU compute services.
Conclusion
Bitcoin mining is undergoing a long-overdue but exceptionally thorough supply-side shakeout.
In the short term, unless Bitcoin’s price quickly rebounds and holds above $80,000, the "mining at a loss" situation will continue to force high-cost miners out of the market. Although the historic difficulty reduction has given survivors a brief respite, the "capitulation phase" may persist until macro liquidity and risk appetite fully shift.
From a long-term perspective, hash power hasn’t disappeared—it’s simply changing form. Companies that successfully convert their power licenses and rack resources into AI compute services will be reborn in the next technology cycle.
For those who still believe in Bitcoin, the numbers on the Gate price page at this moment are both a test and a benchmark—they mark the darkest hour of this cycle, as well as the entry point for the next wave of survivors.
