Mining stocks fall as operators liquidate Bitcoin reserves for AI infrastructure
Bitcoin mining stocks have fallen sharply from 2026 summer peaks as miners shrink reserves and pivot capital toward artificial intelligence infrastructure, leaving the sector vulnerable to seasonal headwinds and without the valuation support of earlier rallies.
- Foundry USA, producing 25% of Bitcoin blocks, sold its last 236 BTC in September and now holds near-zero reserves.
- TerraWulf stock has dropped roughly 50% from its 2026 peak, falling to $14.40 as of the reporting date.
- Mining pools have divested reserves from 1.9 million coins at end-2025 to around 1.19 million coins, a sharp decline driven by data center pivots and quantum risk concerns.
- $38.69 IREN mining stock price, down 6.27% in one month from $67.84 peak in June
- 987 EH/s Bitcoin hashrate in October, near average levels despite earlier record-setting attempts
- 1.19M BTC in mining reserves, down from 1.9M coins at end of 2025
Bitcoin mining remains profitable above the $80,000 price level, yet the sector’s public equities have retreated sharply from summer highs as miners liquidate holdings and redirect capital away from pure hash production. According to reporting by Cryptopolitan, pools are generating 450 BTC per day above cost for most operations, keeping mining economically viable. However, the competitive pressure that drove hashrate records in 2025 has eased into a more balanced, lower-activity environment, and the AI narrative that temporarily buoyed mining stocks has begun to fade as summer valuations prove unsustainable.
Foundry USA empties reserves as mining pools diverge on strategy
The leading mining pool Foundry USA has become a pass-through operation with virtually zero holdings, having announced the sale of its final 236 BTC in September. The pool, which produces roughly 25 percent of all Bitcoin blocks, pays out rewards immediately to third-party miners rather than accumulating treasury positions like traditional mining firms. This contrasts sharply with pools such as Binance Pool, which retains 41,897 BTC (down modestly from 42,000 BTC in March), and F2Pool, which has gradually reduced holdings from 6,000 BTC to approximately 4,000 coins over two years.
The divergence reflects competing strategies across the mining ecosystem. Mining reserves as a whole have fallen to near all-time lows, dropping from 1.9 million coins at the end of 2025 to roughly 1.19 million coins. Miners historically held excess BTC as a defensive reserve against market volatility, but are now liquidating strategically to fund data center buildouts for artificial intelligence workloads and to hedge quantum computing risks.
Foundry USA also announced that CEO Mike Colyer will step down into a consultancy role for the next six months, signaling operational shifts within the largest individual pool.
Mining stocks collapse 50% from peaks as AI tailwind weakens
Public Bitcoin mining equities have surrendered months of outsized gains in recent weeks. TerraWulf (Nasdaq: WULF) has fallen approximately 50 percent from its 2026 peak, trading near $14.40, while IREN dropped 6.27 percent in a single month to $38.69 after reaching $67.84 in June. The broader cohort of mining stocks peaked in early summer when investors viewed mining reserves as valuable inventory and the sector benefited from overlap enthusiasm with AI data center expansion. As that narrative matured and mining firms’ Bitcoin reserves shrank, valuations contracted sharply.
The loss of the AI growth story has removed a key prop beneath mining equity multiples. Many operations rely on older, legacy data center infrastructure that cannot easily pivot to high-margin AI hosting, leaving them dependent on mining economics alone.
Without reserve appreciation or strategic-buyer premiums, mining stocks now trade closer to cash-flow multiples tied directly to BTC price and hashrate profitability.
Hashrate stabilizes near historical average as difficulty trends lower
Bitcoin hashrate reached approximately 987 exahashes per second in October, sitting near the average level for the full year despite earlier momentum toward record peaks. Difficulty, which adjusts roughly every two weeks to maintain a ten-minute average block time, has trended downward through most of 2026, creating a favorable environment for existing mining hardware. The hash ribbon indicator, which tracks miner distress by monitoring 30-day and 60-day moving averages of hashrate, shows miners have remained outside severe distress zones for the past two months, indicating continued willingness to operate at current margins.
Winter seasonal dynamics pose an additional headwind: reduced hydroelectric power availability in cold months typically constrains mining volumes and margin compression.
The CCS read. Institutional investors holding mining equities face a re-rating away from asset-heavy book value toward pure cash-flow generation. The pivot to AI, while real, has not delivered scale returns to shareholders and may signal that mining firms lack competitive advantages in data center competition against cloud providers. Reserve liquidation, though rational for operational funding, eliminates a psychological floor beneath equity valuations and locks in realized losses for equity holders who rode summer rallies.
Watch for further capitulation in mining stock valuations heading into the fourth quarter as seasonal power constraints tighten margins and the absence of a reserve-appreciation narrative forces a full repricing toward sustainable mining economics, likely contingent on Bitcoin price holding above $80,000 and on the success of specific firms’ AI facility deployments to generate outsized returns relative to pure mining operations.