Will Bitcoin replace SHA-256 before 2027?

Prediction markets put the probability at 6%: Will Bitcoin replace SHA-256 before 2027. Currently, markets see this as unlikely (6% YES). Miners are pivoting to AI: Bitdeer sold all BTC, MARA sold 10k+ BTC to fund AI data centers.

What’s Happening

Bitcoin's mining ecosystem entered Q2 2026 in structural contraction. Publicly listed miners sold over 32,000 BTC in Q1 2026, exceeding the full-year volume of 2025 and setting a quarterly record. Hashprice held near $33/PH/s/day, below the estimated breakeven of $35, leaving roughly 20% of miners in the loss-making zone. Bhutan trimmed its sovereign Bitcoin holdings by 70% during the same window. The data points to capital flight from SHA-256 hashpower rather than coordinated investment in alternative cryptographic algorithms. [WuBlockchain, May 4]

The strategic pivot deepens the case against any near-term proposal to bitcoin replace sha-256. Bitdeer sold its entire BTC treasury and MARA offloaded more than 10,000 BTC to fund AI data centers, while IREN Limited announced plans to repurpose roughly 300 megawatts of mining capacity for GPU-based AI and high-performance computing workloads. The Bitcoin 2026 conference at the Venetian Macao on April 27-29 drew over 40,000 attendees, with the U.S. strategic Bitcoin reserve and the AI migration dominating the agenda — protocol-level cryptography revisions did not appear among headline topics. [MEXC, May 2]

A coordinated effort to bitcoin replace sha-256 would require a contentious hard fork backed by miners, node operators, and major exchanges — a mobilization difficult to assemble while ~20% of hashpower is unprofitable and capital is rotating toward AI infrastructure. American Bitcoin Corp. recorded a $117 million book impairment in Q1 after a 22% decline in BTC prices, underscoring balance-sheet pressure across the mining cohort. Regulatory attention has shifted elsewhere: the Bank of Canada stated on May 6 that domestic stablecoin rules could launch by mid or late 2027, with no parallel proposal targeting Bitcoin's hashing algorithm. With roughly seven months remaining until the January 1, 2027 resolution date, no Bitcoin Improvement Proposal aimed at SHA-256 replacement has progressed to client implementation. [Kitco, May 6]

Traded on Polymarket — $184K Volume

Polymarket prices this at 5c YES with $184K in volume. Moderate liquidity — use limit orders for positions above $1K to avoid moving the price.