Miners capitulate as Bitcoin mining difficulty sees steepest decline since 2021

Bitcoin mining difficulty fell by roughly 11% in its latest adjustment, marking the largest decline since China’s 2021 crackdown on the sector, as falling prices and winter storm–related power outages in the U.S. forced miners offline.

The adjustment reduced difficulty from more than 141.6 trillion to about 125.86 trillion, according to Blockchain.com. Mining difficulty recalibrates roughly every two weeks to keep block production near Bitcoin’s 10-minute target.

The drop reflects mounting pressure across the mining industry. Bitcoin has slid from an all-time high of $126,000 in October to around $69,500, sharply compressing margins. Revenue per unit of computing power has deteriorated, with bitcoin revenue per petahash falling from about $70 at the peak to roughly $35.

Lower prices have pushed many miners, particularly those running older machines or facing high electricity costs, to shut down equipment. Some operators have also redirected hardware toward artificial intelligence workloads, where large technology firms offer longer-term contracts and steadier returns.

Bitfarms said it is no longer focused solely on bitcoin mining and is pivoting toward data center development for high-performance computing and AI, a shift that helped drive a sharp rally in its shares.

Severe winter storms, especially in Texas, added to the strain. Grid operators issued curtailment requests to prioritize residential power demand, prompting public mining firms to scale back operations. Some reported daily bitcoin production declines exceeding 60%.

While the decline in difficulty may appear concerning, it is a self-correcting mechanism. For miners that remain online, reduced competition can improve profitability and support network stability.

Historically, sharp difficulty drops have coincided with periods of miner capitulation and have often preceded price stabilization or rebounds as miners sell bitcoin to cover operating costs.