Bitcoin Mining Difficulty Set for Biggest Drop Since 2021 China Ban

Bitcoin’s mining difficulty is set to decline by about 11.4% in about two hours, which would mark the largest downward change since the aftermath of China’s sweeping bitcoin mining ban in 2021.

Network data shows that a 11.4% downward adjustment would even exceed the miner capitulation at the bottom of the previous bear market in December 2022. The sharp pullback reflects a combination of short-term disruptions and weakening mining economics.

A recent winter storm in the U.S. forced as much as 40% of the network’s hashrate offline at one point, while bitcoin’s slide below $70,000 pushed miner revenues lower. Subsequently, bitcoin’s hashprice has fallen below $30 per petahash per second (PH/s), approaching levels that leave much of the industry operating at or below break-even.

Recent quarterly filings underscore how tight margins have become even for the sector’s largest players. TheEnergyMag’s analysis shows CleanSpark and IREN’s total cash-based mining costs amounted to $30/PH/s and $26/PH/s, respectively. With hashprice hovering in the low-$30/PH/s range, the economics of bitcoin mining are effectively reduced to a break-even proposition for some of the most efficient public operators.

An 11.4% difficulty decline would offer near-term relief, lifting hashprice to roughly $35/PH/s if bitcoin’s price holds steady. That would provide a temporary boost to operating cash flow for miners that remain online after recent outages.

Still, the broader pressure on the sector remains evident. Bitfarms has been actively deleveraging amid the downturn in mining economics, as previously reported, as part of a strategy to pivot away from bitcoin mining toward AI and HPC-focused power infrastructure.