Twenty One Capital: miners abandon Bitcoin en masse for AI

Bitcoin is experiencing its first historic decline in network hashrate, and it is not a temporary phenomenon. Rapha Zagury, CEO of the Tether-backed Bitcoin treasury company Twenty One Capital, said at Bitcoin Asia 2026 that the sector is undergoing a structural shift. Whereas after China’s mining ban in 2021 miners simply moved to other regions, they are now opting en masse for a very different direction: AI and high performance computing.

Bitcoin is available at OKX and Bybit.

In short:

• Bitcoin hashrate has been declining for some time and is in what Zagury calls the first ‘hashrate bear market’
• The current decline differs fundamentally from the drop following China’s mining ban in 2021
• Virtually all listed miners are switching from large-scale Bitcoin mining to AI and HPC

First hashrate bear market ever

The Bitcoin network hashrate reached a peak of nearly 1.3 ZH/s at the end of last year, after which a steady decline set in. According to Zagury, this is the longest period ever measured between a hashrate record high and recovery, and that recovery is not yet in sight.

He draws a clear distinction with what happened in 2021. When China banned Bitcoin mining, miners simply moved to other countries and the hashrate recovered relatively quickly. Now the causes are different: miners face a choice between infrastructure for Bitcoin or for AI and high performance computing, and that trade-off is increasingly working out to Bitcoin’s disadvantage.

Miners choose AI over Bitcoin

Zagury says that virtually all listed mining companies have by now moved away from purely large-scale Bitcoin mining towards AI. According to him, this has to do with the so-called optionality that mining offers: the same energy infrastructure can be deployed for multiple purposes, something that is rarely priced in when it comes to Bitcoin mining.

Another advantage of mining is flexibility. Unlike a steel plant, which takes months to restart after a power outage, miners can switch machines on and off almost immediately. That characteristic also makes mining attractive to energy companies and governments looking to utilise surplus grid capacity and stabilise the electricity grid.

The shift to AI is taking place while September is historically the weakest month for Bitcoin. At the time of writing, the price stands at $76K, down 1.6% over the past 24 hours.