Bitcoin Mining Faces Its First Hashrate Bear Market

The Bitcoin network has seen its hashrate drop by roughly 22% to 24% from its late 2025 peak of 1.3 zettahashes per second. While previous declines, such as the 2021 Chinese mining ban, were driven by forced relocations of hardware, the current trend reflects a strategic choice. Mining operators are increasingly favoring high-performance computing over Bitcoin mining, reallocating power capacity and data center resources to meet the massive demand for AI infrastructure.

This shift is reshaping the competitive landscape. Companies like TeraWulf, IREN, and Core Scientific are already reporting significant revenue from AI hosting, with some firms pivoting away from traditional mining operations entirely. For the miners remaining in the industry, however, the decline presents a potential advantage. As hashrate leaves the network, Bitcoin’s difficulty adjustment mechanism lowers the barrier for block production, allowing survivors to capture a larger share of rewards without needing to deploy new equipment. Zagury noted that while profitability remains tied to Bitcoin price volatility and operational costs, the most efficient miners are positioned to gain market share as their higher-cost competitors exit the space.