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 (NASDAQ: BITF) 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.