Bitcoin Mining Profits Plummet to 2015 Lows Amid AI, Market Volatility

Bitcoin mining profits drop to 2015 lows – AI, market volatility to blame?

Bitcoin mining profits have plummeted to levels not seen since 2015, according to a recent report by CoinShares. The crypto asset management firm attributed this decline to the impact of artificial intelligence (AI) and market volatility.

CoinShares' report noted that the release of a new open-source large language model by Chinese startup DeepSeek led to a sell-off in U.S. AI-related stocks, which in turn dragged down crypto prices. Both Bitcoin and Ethereum suffered significant losses, but Bitcoin managed to recover somewhat.

Despite the initial sell-off, the market rebounded later in the week, with over $1 billion in inflows recorded across all crypto funds. However, the trend slowed down following U.S. President Donald Trump's announcement of tariffs against Canada, China, and Mexico.

MicroStrategy, one of the world's largest BTC holders, broke its 12-week streak of consecutive weekly Bitcoin purchases. The firm did not sell any shares of Class A common stock or buy BTC last week, marking a significant shift in its investment strategy.

MicroStrategy's pause in Bitcoin purchases comes amid market instability and potential tax liabilities on unrealized gains. The firm holds 471,107 BTC acquired for approximately $30.4 billion at an average price of $64,511 per Bitcoin.

Meanwhile, Ethereum investment products saw net zero flows for the first time since U.S.-based ETFs were approved last year. Ethereum's price dropped to as low as $2,368 on Monday morning Eastern Time, before recovering to around $2,740.

CoinShares' head of research, James Butterfill, attributed Ethereum's struggles to its greater exposure to the technology sector and the global growth outlook. He noted that the asset ended the week with net zero flows but suffered earlier in the week.

As the crypto market continues to grapple with AI-related sell-offs and market volatility, investors and analysts will closely monitor MicroStrategy's next moves and Ethereum's performance. The intersection of financial strategy, tax implications, and market stability will play a crucial role in shaping the investment trajectory of these prominent crypto assets.