Bitcoin mining difficulty falls 11.16%, largest since 2021

Bitcoin mining difficulty fell 11.16%: price, weather, hashrate decline

Bitcoin’s mining difficulty declined 11.16% to about 125.86 trillion at block height 935,424, the steepest single negative adjustment since China’s 2021 mining ban, as reported by The Block. The publication also noted roughly a 20% month‑over‑month hashrate decline amid a weaker BTC price environment and grid curtailments tied to Winter Storm Fern.

Such sharp difficulty drops typically follow revenue stress for miners. Lower bitcoin prices, elevated power costs, and weather‑related shutdowns can push less efficient fleets offline, reducing hashrate and triggering a downward difficulty recalibration to keep blocks arriving on schedule.

Why it matters: miner profitability, network cadence, security considerations

A difficulty reduction can temporarily ease unit economics for operators that remain online, but overall profitability still hinges on the intersection of bitcoin’s price, power tariffs, and fee revenue. Fewer active machines mean the protocol targets normal block times again, yet the underlying security budget, driven by miner revenue, remains sensitive to market conditions.

Institutional research has described these stress periods as potential “miner capitulation” phases that sometimes precede stronger forward returns; according to VanEck, past episodes of sustained hashrate compression have historically been followed by positive 90‑day performance, though such patterns are not guarantees. The framing emphasizes that shakeouts tend to remove higher‑cost capacity while improving the position of leaner operators.

Some industry developers emphasized the historical scale of the move before considering any broader implications. “The 10th largest in Bitcoin’s history,” said Mononaut, a Bitcoin developer.

Research perspectives also point to how exit pressure can influence market psychology: Bernstein analysts have previously suggested that notable miner stress events often coincide with expectations for price stabilization as uneconomic production winds down. That interpretation remains contingent on prevailing liquidity, energy markets, and the pace of additional capacity returns.

Immediate impact: miner economics and block production cadence

Immediately after a large downward adjustment, surviving miners should experience a modest uplift in block‑finding odds and revenue share, all else equal. If weather‑driven curtailments abate while prices remain soft, some sidelined capacity could return, tempering the relief.

Based on data from Luxor, mining revenue per petahash reached a record low of about $33.31 per PH per day, implying that only the most efficient fleets likely operated near breakeven during the drawdown. Older‑generation rigs and high‑cost sites would be the first to idle or decommission when revenues compress to those levels.

For network cadence, the adjustment is designed to pull average block intervals back toward roughly ten minutes, smoothing the slowdown that preceded the retarget. Short‑term variability can persist if weather or power prices remain volatile, but the mechanism aims to normalize confirmation flow over the following epoch.

At the time of this writing, Bitcoin traded around $69,324 with high realized volatility near 8.68% and a neutral 14‑day RSI reading of 34.33. These figures provide market context to miner revenue conditions without implying any directional view.

How Bitcoin’s difficulty adjustment maintains roughly ten-minute blocks

Bitcoin recalibrates mining difficulty every ~2,016 blocks, about once every two weeks, to target ~10‑minute average block intervals. When hashrate falls because miners unplug due to costs, price pressure, or weather, blocks arrive more slowly during that epoch, and the next retarget lowers difficulty to restore cadence. Conversely, when hashrate rises, difficulty increases, maintaining predictable block production independent of short‑term swings in mining capacity.