Key Points:
- Difficulty fell about 11% to 125.86 trillion, the largest decline since 2021.
- Hashprice halved from roughly $70 to $35 per petahash, squeezing margins.
- Winter storms and grid curtailments in Texas sharply reduced output for some miners.
- Some firms are shifting capacity toward AI compute, accelerating exits of older rigs.
Bitcoin mining difficulty has recorded its steepest single decline since China’s 2021 mining ban, falling roughly 11% after a sharp pullback in network hashrate. The adjustment lowered difficulty from about 141.6 trillion to 125.86 trillion, reflecting a period of stress for miners driven by weaker prices and power disruptions.
Bitcoin Mining Difficulty Falls as Hashrate Retreats
The Bitcoin network adjusts mining difficulty roughly every two weeks to keep block times near 10 minutes. When the hashrate drops, the protocol reduces difficulty to rebalance the system. That is what occurred during the latest adjustment epoch, according to network monitors including Blockchain.com.
The decline followed a combination of economic and operational pressures. Bitcoin’s spot price slid sharply from recent highs to around $69,500, cutting the dollar value of block rewards. At the same time, hashprice, a standard measure of miner revenue per terahash, fell to just over $35, roughly half its peak level. The squeeze pushed high-cost and older rigs offline, accelerating the drop in hashrate.
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Weather-related power constraints added to the pressure. During a winter storm in Texas, grid operators curtailed electricity supply at peak hours, forcing several publicly listed miners to scale back operations. Company disclosures indicated that some operators experienced production losses of up to 60% during those periods.
Miner Capitulation Risks and Short-term Relief
Large declines in difficulty often coincide with phases of miner capitulation. As margins compress, operators with higher power costs are more likely to shut down equipment and sell mined bitcoin to cover expenses. Historically, these episodes have marked periods of forced selling followed by stabilization once weaker participants exit the network.
While the difficulty adjustment reflects the pain miners endured before the change, it also offers short-term relief to those still operating. Lower difficulty means less competition for block rewards, improving revenue per unit of hashrate for miners that remain online, even without a rebound in bitcoin’s price. Some firms have also begun diversifying infrastructure use.
Mining companies such as Bitfarms have highlighted efforts to pivot portions of their facilities toward high-performance computing and data-center services, though these initiatives remain limited and capital-intensive rather than a direct replacement for bitcoin mining.
Uncertainty persists over what comes next. If prices stabilize and power conditions normalize, sidelined hashrate could return, pushing difficulty higher again. If not, prolonged shutdowns may deepen consolidation across the sector. For now, the latest adjustment underscores how quickly mining economics can shift when price volatility and energy constraints collide.
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