Mining Stocks Are Moving Further Away from Crypto

Author: Zhou, ChainCatcher

According to market data from RootData, over the past year, BTC has fallen by 46.12%, but Bitcoin mining stocks have not followed suit. Among them, HUT has risen by 363.26%, WULF by 268.95%, IREN by 121.14%, RIOT by 59.90%, and CLSK by 12.41%.

This surge has not been based on improvements in the mining fundamentals. June's operational data shows that despite a continuous decrease in mining difficulty, the output of CleanSpark, BitFuFu, and Canaan has still declined by 9% to 29% month-on-month.

It is evident that the focus of the market has shifted. Since July, CleanSpark has signed an initial 20-year infrastructure lease worth approximately $6.6 billion, TeraWulf plans to raise $3.5 billion to expand its data center campus, and MARA has acquired a Texas-based project company with a planned power capacity of up to 2 GW for a maximum of $600 million.

Mining stock prices are no longer solely revolving around coin prices, output, and hash rates; the market has begun to value them based on a different logic.

The Source of Mining Stock Volatility Is No Longer On-Chain

At the beginning of this month, there was a typical dislocation in the market, with mining stocks retreating by about 20% while BTC remained stable around $64,000.

On the output side, CleanSpark produced 614 BTC in June, down from 671 BTC in May, a month-on-month decline of 9%. Its nominal hash rate was 50 EH/s, but the average operational hash rate was only 42.6 EH/s, with the gap widening from 3.8 EH/s in May to 7.4 EH/s, indicating downtime or reduced load.

BitFuFu produced 125 BTC, a month-on-month decline of 29.4%, with total hash rate dropping from 19.5 EH/s to 15.3 EH/s, mainly due to a reduction in third-party hosted hash rate from 16.3 EH/s to 11.8 EH/s.

Canaan produced 64 BTC, a month-on-month decline of 29%, with the company attributing part of the reason to grid maintenance at its mining site.

This reduction in output occurred after a series of difficulty adjustments. On June 14, Bitcoin network difficulty was reduced by 10.09%, marking the second-largest negative adjustment since 2026. On July 11, it dropped another 5% to 127.17 T, a cumulative decline of about 18% from a peak of approximately 155 T in November 2025.

A decrease in difficulty should have allowed miners remaining on the network to mine more coins per unit of hash rate, yet output continues to decline.

On the other hand, in the context of a sluggish market and pressured profitability, some miners are continuously exiting the network or shutting down equipment. Galaxy Research states that miners are entering a surrender phase, marking the largest withdrawal since the comprehensive crackdown on Bitcoin mining in China in 2021.

The reasons for the exit are straightforward. According to CoinShares' Q1 2026 mining report, the average cash production cost for listed mining companies had risen to approximately $79,995 in Q4 2025. JPMorgan estimates the current production cost to be around $78,000, while BTC's current price is around $64,000, with a price gap that has persisted for five months, leaving about 20% of miners in a state of loss.

According to Hashrate Index data, around March 2026, hashprice briefly fell to a new low of $28 to $30 per PH/s per day after the halving, currently around $32, still in the historically lowest range.

Valued Within the AI Infrastructure Framework

The new logic is not complicated. AI data centers currently lack essential resources such as connected power capacity, contiguous land, cooling, and building infrastructure, which mining companies happen to possess.

They have large-scale power connection capabilities, sites that can be transformed, established operational systems, and are more familiar with the construction rhythm of high-load facilities.

PJM data shows that AI infrastructure projects that will be operational by 2025 take an average of over seven years, with about three years spent obtaining interconnection service agreements and another four years waiting for grid connection. An already connected mining site effectively skips these seven years, and the value of mining companies derives from this.

Take CleanSpark as an example: on July 14, the company announced it had signed a 20-year tripartite lease with a high-investment-grade technology company, located in the Sandersville campus in Georgia, with initial contract revenue of approximately $6.6 billion corresponding to a critical IT load of 175 MW, with deliveries starting in Q4 2027. The market reacted positively, with CLSK rising by 22% during the day.

Similarly, in July, MARA spent up to $600 million to acquire a Texas-based project company with a planned power capacity of up to 2 GW. However, this company only holds a letter of intent signed with the power company. The gap between the letter of intent and actual power connection is precisely those seven years.

Additionally, the credit market is also pricing them according to new standards. According to Bloomberg, TeraWulf plans to raise $3.5 billion led by Morgan Stanley, including leveraged loans and high-yield bonds, to expand its Justified Data campus in Horseville, Kentucky, marking its first entry into the leveraged loan market. Lenders are beginning to assess miners' balance sheets based on infrastructure.

According to Guosheng Securities' research report, as of early May 2026, the total amount of signed site hosting, bare metal, and cloud contracts in the sector has reached approximately 3,201 MW of critical IT load, with a total contract value exceeding $91.4 billion. The institution also found a clear positive correlation between the market capitalization of companies in the sector and their AI power reserves and signed AI power in North America.

CoinShares predicts that by the end of 2026, up to 70% of the revenue of listed mining companies will come from AI and HPC, up from about 30% at the beginning of the year. TeraWulf has already reached this milestone, with its HPC leasing revenue of $21 million in Q1 surpassing its mining business revenue of less than $13 million for the first time.

The Cost of Revaluation: Three Layers of Risk

The first layer of risk comes from valuation.

Mining companies are being revalued based on AI infrastructure, which means they must endure the overall volatility of the AI narrative.

According to a report from 10x Research, Bitcoin mining stocks have largely decoupled from the price trends of the coin, with RIOT's stock price showing increased correlation with the Philadelphia Semiconductor ETF since April 2026.

Bitcoin mining companies are now deeply tied to the AI theme, which currently revolves more around global supply chains and competition rather than crypto adoption or financial digitization. Additionally, the performance of Chinese LLM concept stocks and the outlook for the South Korean semiconductor supply chain are directly influencing the trends of Bitcoin mining stocks.

After experiencing a significant surge, these sectors are now seeing a contraction in risk appetite. The Philadelphia Semiconductor Index has fallen by 10.8% over ten trading days, with Reuters estimating that the entire industry has evaporated about $1.3 trillion in market value, attributing the root cause to doubts about the return on investment in AI infrastructure, bubble-level valuations, and a more hawkish Federal Reserve.

The second layer of risk comes from return rates.

According to a Bernstein report, the five-year average asset return rate for Core Scientific and CoreWeave's collaboration reached 75%, but the driving factor is the capital expenditure structure rather than the transaction terms, with tenants bearing $750 million of the total cost of $855 million through income prepayments. Riot relies on transforming existing mining sites, achieving a return rate of 23%.

However, these two are not industry benchmarks; the report indicates that the baseline return rate for the industry actually falls at TeraWulf 5%, Cipher 4%, CleanSpark 4%.

A report on July 1 stated that Meta plans to launch Meta Compute to sell surplus AI training and inference computing power to enterprise customers, causing the Philadelphia Semiconductor Index to drop by 6.3% that day. The following day, SK Hynix's CEO announced that the SK Group would invest 100 trillion KRW in South Korea to build AI data centers in phases, starting with 5 GW and eventually expanding to 15 GW.

Meta, as the largest buyer, claims to have surplus capacity, while chip manufacturers say they will build their own, whereas mining companies are signing long-term contracts of 15 to 20 years, not already realized revenue. The 20% pullback in mining stocks earlier this month stemmed from this.

The third layer of risk comes from execution.

Mining companies are now pricing for the future rather than realized revenue. For instance, CleanSpark has just signed a $6.6 billion long-term contract, but its revenue currently still comes entirely from Bitcoin mining, and the AI business has yet to generate substantial income, with the first deliveries not expected until Q4 2027.

Valuation has already taken a step forward, but realization must pass through three major hurdles:

The first hurdle is financing capability. According to CleanSpark's submitted 8-K, the construction cost for the campus is $10 million to $12 million per MW, corresponding to $1.75 billion to $2.1 billion in capital expenditure for 175 MW. This money has yet to be raised. The document also states that failure to achieve any of the financing, construction, or delivery milestones will trigger rent reductions or even lease termination.

The second hurdle is regulatory permits. On July 14, New York Governor Hochul signed an executive order suspending the issuance of state-level permits for large data centers, with a threshold of over 50 MW of grid demand. The New York State Environmental Protection Agency has suspended all discretionary permits not deemed complete before July 14, with the suspension period tied to the completion of the general environmental impact statement rather than a fixed date, lasting up to a year.

The third hurdle is tenant quality. Bernstein points out that tenant quality directly affects the valuation level of mining companies. Large-scale cloud providers can bring more stable cash flow and lower financing costs, while small GPU cloud service providers correspond to higher operational risks and capital costs.

Miners' Selling Logic Decoupled from Coin Prices

The valuation logic has changed, and miners' behaviors have followed suit. However, this change has a more direct impact on the crypto space, reflected in how miners sell coins.

According to industry reports, listed mining companies sold approximately 32,000 BTC in Q1 2026, exceeding the total for the entire year of 2025. Among them, Riot produced 1,473 BTC in Q1 and sold 3,778 BTC during the same period, more than double its output, reducing its holdings to 15,680 BTC, an 18% year-on-year decrease.

In the past, miners sold coins primarily based on cash flow logic, selling coins to pay for electricity, repay loans, and maintain daily operations, reluctant to sell at low prices, waiting for a rebound to sell. Now, there is an additional layer of transformation financing logic, where selling coins is also to make room for repairs, land acquisition, capex, and longer-term AI construction plans.

Thus, even if coin prices do not experience extreme fluctuations, miners may continue to sell coins.

The same logic also determines that the exiting hash rate may not return.

In the past, the market assumed that hash rates exiting the network would return after coin prices rebounded and difficulty decreased. After the comprehensive crackdown on mining in China in 2021, difficulty dropped by 46%, and it was recovered in just six months. However, those leaving now may not just be mining machines, but also the underlying electricity and capital expenditures.

Currently, mainstream AI contracts are mostly long-term contracts of over ten years. Once mining companies lock their sites, power, and financing structures into such contracts, resources will be difficult to flow back to BTC mining as flexibly as before.

Therefore, mining companies are moving further away from crypto; more accurately, the capital market has begun to value them based on their departure from the pure mining framework.

They will still impact the Bitcoin network and continue to earn income from mining, but their pursuit of electricity, land, and long-term leases is transforming them into a different type of company.

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