Bitcoin miners pivot to AI as institutional flows surge amid Middle East tensions

The link">bitcoin mining sector is undergoing a dramatic strategic shift as major players liquidate BTC holdings to fund AI infrastructure investments. [Core Scientific](https://www.theblock.co/post/391967/bitcoin-miner-core-scientific-to-sell-bulk-of-btc-holdings-in-2026-to-fund-ai-pivot) plans to sell the bulk of its bitcoin holdings in 2026 after already disposing of $175 million worth, with the company emphasizing its colocation revenue jumped to $31.3 million from $8.5 million in 2024. [MARA has similarly expanded its policy](https://www.theblock.co/post/391979/mara-opens-door-to-selling-stockpiled-bitcoin-in-new-policy-shift) to allow balance sheet bitcoin sales after reporting a $422.2 million fair-value decline in 2025. This pivot reflects the mining industry's recognition that AI and high-performance computing represent more lucrative opportunities than pure bitcoin mining. [Riot Platforms reported record annual revenue of $647 million](https://www.theblock.co/post/391871/riot-platforms-reports-record-annual-revenue-of-647-million-amid-ai-and-hpc-push) amid its AI and HPC push, with activist investor Starboard Value suggesting this new focus could be worth as much as $21 billion. The sector is fundamentally restructuring from bitcoin accumulation vehicles to diversified data center operators, marking a significant evolution in the mining thesis.

Institutional demand for bitcoin exposure continues strengthening despite—or perhaps because of—escalating global tensions. [Spot bitcoin ETFs recorded $458 million in net inflows](https://www.theblock.co/post/391943/us-bitcoin-etfs-458-million-net-inflows), with analysts telling The Block that institutions increasingly view bitcoin as a maturing diversifier asset amid global instability. This institutional adoption narrative gained further validation as [CME reported capturing over 75% of the crypto market cap](https://www.theblock.co/post/391818/cme-says-it-captures-over-75-of-the-crypto-market-cap-with-recent-introduction-of-cardano-chainlink-and-stellar-futures) with its recent introduction of Cardano, Chainlink, and Stellar futures, providing institutional investors with sophisticated risk management tools. Meanwhile, geopolitical events are creating visible crypto market dynamics. [Iran's cryptocurrency ecosystem saw trading volume plunge 80%](https://www.theblock.co/post/391892/iran-crypto-structurally-sound) following military strikes, though TRM Labs notes the infrastructure remains structurally sound. More tellingly, [crypto outflows spiked 700% on Iran's largest exchange Nobitex](https://www.theblock.co/post/391781/crypto-outflows-700-largest-iranian-exchange-us-israeli-attack-elliptic) following the US-Israeli attack, demonstrating how crypto serves as a financial escape valve during geopolitical crises. [Benjamin Cowen notes parallels between today's geopolitical situation and 2022's patterns](https://www.youtube.com/shorts/FCEhiG5PzBI), though he expects bitcoin to form a lower high in early March before declining into April/May.

link">Ethereum stands at the threshold of its most significant architectural transformation since the Merge. [Vitalik Buterin has proposed a comprehensive overhaul](https://www.theblock.co/post/391840/vitalik-buterin-eyes-big-focil-and-encrypted-mempools-to-prevent-centralization-in-block-building-pipeline) of Ethereum's execution layer, arguing that incremental upgrades are insufficient for long-term scalability. [Launchy reports](https://launchy.beehiiv.com/p/vitalik-proposes-major-ethereum-overhaul) that Vitalik's two-part proposal would replace Ethereum's Merkle Patricia state tree with a binary tree, pointing to the state tree and VM as the main proving bottlenecks. The proposed changes extend beyond technical upgrades to address centralization concerns. Vitalik advocates for 'big FOCIL' and encrypted mempools to prevent centralization in the 'block building pipeline,' noting that while the upcoming Glamsterdam upgrade will boost Ethereum's censorship-resistance, a proposed mechanism called ePBS could paradoxically cause centralization. This represents a fundamental rethinking of Ethereum's architecture, with implications for every application built on the platform. The technical complexity and coordination required suggest this could be a multi-year transformation process.

The DeFi governance landscape is experiencing significant upheaval as key service providers reassess their relationships with major protocols. [Marc Zeller's link">Aave Chan Initiative (ACI) will not renew its engagement](https://www.theblock.co/post/391872/aave-chan-initiative-marc-zeller-leave-governance-tensions) with Aave DAO and plans to wind down over four months, marking the departure of a major delegate and service provider amid growing governance tensions. This development underscores the challenges facing DAO governance structures as they mature and stakeholder interests potentially diverge. Meanwhile, [Uniswap achieved a significant legal victory](https://www.theblock.co/post/391858/uniswap-wins-dismissal-scam-token-class-action) with a full dismissal in a long-running scam token class action, with the judge noting that plaintiffs had multiple opportunities to amend their complaint but failed to state a viable claim. This sets important precedent for DeFi protocol liability. On the operational front, [Pump.fun expanded its mobile app](https://www.theblock.co/post/391855/pump-fun-adds-support-tokens-launched-rival-memecoin-generators-other-non-native-assets) to support tokens launched on rival generators and other non-Pump-native assets, demonstrating the competitive dynamics forcing platforms to become more inclusive to retain users.

[Haseeb Qureshi of Dragonfly argues that crypto's complexity for humans is actually a feature, not a bug](https://www.bankless.com/podcast/haseeb-quereshi-cryptos-not-made-for-humans-its-for-ai), as blockchains and smart contracts are machine-readable systems that AI agents can parse and execute more reliably than people. This thesis suggests crypto's future lies in agent-driven interactions rather than human wallet clicking, potentially reshaping the entire user experience paradigm. Qureshi envisions a two-track future of agent commerce: safe, human-approved flows alongside wild-west frontier experimentation. The infrastructure to support this vision is rapidly developing. [Dune launched MCP integration](https://t.me/shoalresearch/13233) enabling direct integration with Claude, ChatGPT, and Cursor for blockchain data queries, while [Nous Research introduced the Hermes Agent](https://t.me/shoalresearch/13235), an open-source agent that runs across CLI and messaging platforms with persistent memory. However, [ChatGPT uninstalls surged 295% following OpenAI's Department of Defense deal](https://t.me/shoalresearch/13243), highlighting the tension between AI advancement and public trust—a dynamic that could significantly impact crypto-AI convergence.

Central bank digital currency developments are accelerating globally while facing political headwinds in the US. [Bank of Japan Governor Kazuo Ueda announced](https://www.theblock.co/post/391945/bank-of-japan-blockchain-reserve-settlement) a sandbox program to test whether central bank money can operate in blockchain-based systems, representing a significant step toward integrating traditional monetary systems with distributed ledger technology. This technical exploration by one of the world's most conservative central banks signals growing mainstream acceptance of blockchain infrastructure. Conversely, US political sentiment remains strongly opposed to CBDCs. [The US Senate advanced an anti-CBDC housing bill with bipartisan support](https://www.theblock.co/post/391889/us-senate-anti-cbdc-housing-bill), including provisions prohibiting the Federal Reserve from issuing a CBDC through early 2031. This political resistance creates an interesting divergence where the US financial system may lag in CBDC development while other major economies, particularly in Asia, advance their digital currency initiatives.