How Soaring Energy Demand Helped Push Bitcoin Below $90,000

Market Overview - Bitcoin dropped below $90,000 for the first time since April, reaching an intraday low of $89,426 before closing near $91,200, marking a decline of over 20% from its October peak above $126,000, erasing all gains for 2025 [1] Supply-Side Pressures - Significant supply-side pressure is coming from Bitcoin miners, who are facing higher electricity costs due to the growth of AI data centers, which is squeezing mining profitability and prompting liquidation of holdings [2] - Electricity constitutes 70-80% of Bitcoin mining costs, and the April 2024 halving reduced the block reward to 3.125 BTC, leading many operators to operate on narrow margins even when prices were above $100,000 earlier this year [3] Rising Electricity Costs - Wholesale power prices in key mining regions have increased, with average prices in ERCOT (Texas) rising 18% year-over-year in Q3 2025, and Northern Virginia seeing a 13% increase [3] - The U.S. Energy Information Administration projects national wholesale power prices to rise another 8.5% in 2026, driven by demand from data centers, with power consumption from U.S. data centers expected to double from 200 terawatt-hours in 2024 to over 400 TWh by 2030 [4] Miner Behavior - On-chain analytics indicate that miners moved approximately 71,000 BTC to exchanges in the first two weeks of November, with an additional 210,000 BTC transferred in October, marking some of the highest monthly totals since the 2022 bear market [5] - Large publicly traded miners like Marathon Digital, Core Scientific, and Iris Energy are shifting focus, with Marathon selling production to cover expenses and others signing contracts for AI workloads at significantly higher revenue rates compared to Bitcoin mining [6] Financial Implications - The shift to AI hosting contracts is financially rational, offering 70-80% EBITDA margins and multi-year revenue visibility, contrasting with the volatility of Bitcoin mining, which results in more coins being available on exchanges amid cooling retail and institutional demand [7]