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Bitcoin’s network hashrate has declined roughly 4% through mid-December—its steepest drop since April—as struggling miners shut down operations amid low prices and rising energy costs, according to new research from VanEck.
But the pain could signal opportunity. VanEck data shows that when bitcoin’s hashrate declines over 90 days, the asset delivers positive returns 77% of the time over the following six months, with an average gain of 72%.
“When hash rate compression persists over longer periods, positive forward returns tend to occur more often and with greater magnitude,” wrote VanEck’s Matt Sigel and Patrick Bush in a Monday research note.
The metric, which measures the total computational power securing the bitcoin network, is widely viewed as a proxy for miner profitability. When it falls, weaker operators are forced offline—a process known as miner capitulation that has historically preceded major rallies.
Bitcoin Hashrate is widely viewed as a proxy for miner confidence, network security, and profitability. When hashrate rises, it typically signals strong miner economics.
When it falls, weaker operators are often forced offline — a process known as miner capitulation.
Historically, that pain has often created opportunity.
VanEck’s data shows that since 2014, Bitcoin’s 90-day forward returns were positive 65% of the time following a 30-day decline in Btc Hashrate.
By contrast, returns were positive just 54% of the time when hashrate increased over the same period.
The bullish case strengthens over longer timeframes. When Btc Hashrate posted negative growth over a 90-day period, Bitcoin delivered positive 180-day returns 77% of the time, with an average gain of 72%, according to VanEck.
The latest Bitcoin Hashrate decline arrives as miners face one of their most challenging environments of the year.
Bitcoin is currently trading around $88,400, nearly 30% below its Oct. 6 all-time high of $126,080, based on CoinGecko data.
Lower prices, combined with rising energy costs in certain regions, have significantly squeezed miner margins.
Sigel and Bush noted that the breakeven electricity cost for a Bitmain S19 XP miner, one of the most commonly deployed machines, has fallen sharply.
The breakeven cost dropped nearly 36% year over year, from $0.12 per kilowatt-hour in December 2024 to roughly $0.077/kWh by mid-December, reflecting widespread shutdowns and loss-making operations.
VanEck attributed much of December’s Bitcoin Hashrate drop — the steepest since April 2024 — to the shutdown of approximately 1.3 gigawatts of mining capacity in China.
The analysts also pointed to a growing structural shift: some mining infrastructure is being redirected toward artificial intelligence workloads, which offer more stable returns.
According to VanEck, this trend could eventually remove up to 10% of Bitcoin Hashrate from the network, tightening supply dynamics over time.
Despite near-term pressure, Btc Hashrate is not collapsing everywhere.
VanEck estimates that at least 13 countries now support Bitcoin mining in some form, including Russia, France, Bhutan, Iran, El Salvador, the UAE, Oman, Ethiopia, Argentina, Kenya, and Japan.
This expansion of state-backed mining suggests that while private miners are capitulating, sovereign and strategic players continue to double down on Bitcoin’s long-term relevance.
For investors, Sigel and Bush argue that Bitcoin Hashrate resets have often marked consolidation phases that precede broader recoveries.
That view aligns with separate research from K33, which said last week that Bitcoin’s prolonged sell-side pressure from long-term holders may be approaching exhaustion after years of steady distribution.
While falling Bitcoin’s Hashrate may look bearish at first glance, history suggests it often signals the opposite.
As weaker miners exit, costs reset, and network pressure eases, Bitcoin has repeatedly staged powerful recoveries.
If past cycles are any guide, December’s Bitcoin Hashrate drop may be less of a warning — and more of a bullish reset.
