Bitcoin Miners Sell Record 32,000 BTC in Q1 2026 to Fund AI Pivot Amid Profitability Crisis

Publicly listed Bitcoin miners liquidated more than 32,000 Bitcoin during the first quarter of 2026, marking a record sell-off as the industry's largest operators redirect billions in capital toward artificial intelligence. This historic shift is unfolding as Bitcoin validation economics reach a critical pressure point, with mining profitability near cyclical lows, production costs surging, and network hashrate under strain.

Record-Breaking Bitcoin Liquidation in Q1 2026

The scale of the first-quarter liquidation reflects the severity of the capital pivot. Public mining firms unloaded more Bitcoin in the first three months of 2026 than they did throughout all of 2025. To contextualize the magnitude, the Q1 offload surpassed the roughly 20,000 Bitcoin dumped during the Terra-Luna collapse in Q2 2022.

According to on-chain data from CryptoQuant, miner reserves have steadily eroded throughout the cycle. Prominent operators are now using their digital treasuries as liquidity engines rather than long-term strategic holdings. Since the start of the current cycle, miners have recorded a net sell of 61,000 BTC.

Key Players Leading the Sell-Off

• Marathon Digital offloaded over 13,000 BTC and has since dropped out of the top three Bitcoin holders.
• Cango sold 2,000 Bitcoin for roughly $143 million to extinguish Bitcoin-backed debt obligations and clear its balance sheet.
• Core Scientific unloaded around 1,900 Bitcoin in January to raise $175 million.
• Riot Platforms sold 4,026 BTC.

Post-Halving Economics Break the Old Model

The mass exodus of capital is driven by a broken economic model, exacerbated by the April 2024 halving, which slashed block rewards from 6.25 BTC to 3.125 BTC. The 50% cut in block subsidies fundamentally repriced the revenue baseline for the entire sector, leaving operators highly vulnerable to market fluctuations.

James Butterfill, head of research at digital asset manager CoinShares, noted that the weighted average cash cost to produce a single Bitcoin for public operators surged to nearly $80,000 in Q4 2025.

Profitability Crisis Deepens

Meanwhile, the revenue side of the equation continues to deteriorate. Hashprice, the metric tracking expected revenue per unit of computing power, plummeted to between $28 and $30 per petahash per second per day in Q1 2026, marking some of the lowest profitability levels on record. Transaction fees remain structurally weak, contributing less than 1% of total block rewards.

As miners pivot to AI, the long-term implications for Bitcoin’s security base are becoming increasingly clear. The shift raises questions about the sustainability of the network’s infrastructure and the future role of public mining firms in securing the blockchain.