Bitcoin’s network hashrate is experiencing its steepest decline since the April 2024 halving, with roughly 400,000 mining machines reportedly going offline in China’s Xinjiang region amid renewed regulatory scrutiny. The dramatic pullback has sent shockwaves through the global mining industry, compressing already razor-thin profit margins and forcing operators worldwide to reassess their strategies heading into the final weeks of 2025.
TL;DR
- Bitcoin’s 30-day SMA hashrate has fallen from approximately 1,160 EH/s to 1,045 EH/s, a 9.9% decline
- Former Canaan chairman Jack Kong reports roughly 400,000 mining machines shut down in China
- Network difficulty stands at 148.2 trillion, with a projected 3% downward adjustment
- Hashprice sits near $37 per PH/s/day, hovering around a five-year low
- The decline marks three consecutive negative difficulty adjustments, the first such streak since July 2022
The China Factor: Xinjiang Shutdowns Reshape Global Hashrate
The catalyst behind the current hashrate decline is a series of enforcement actions targeting mining operations in China’s Xinjiang province. Former Canaan chairman Jack Kong revealed that computing power fell by roughly 100 exahashes per second compared to just one day prior, representing an 8% single-day decline. Based on an average machine efficiency of 250 terahashes per second, this equates to more than 400,000 individual mining rigs being powered down simultaneously.
Kong noted that mining farms across Xinjiang are shutting down one after another, suggesting that the United States and other jurisdictions stand to benefit from the displacement without any direct intervention. The development is particularly striking given that China had only recently resurfaced as the world’s third-largest bitcoin mining hub, accounting for approximately 14% of global hashrate according to data from the Cambridge Centre for Alternative Finance.
The Xinjiang region has long been a focal point for Bitcoin mining due to its abundant and inexpensive coal and hydroelectric power. However, intermittent crackdowns by Chinese authorities continue to create waves of disruption that ripple across the global network. Each enforcement action forces miners to either relocate their equipment to friendlier jurisdictions or absorb the losses from unplanned downtime.
Revenue Compression Forces Legacy Hardware Offline
Beyond the China-specific disruptions, the broader economic environment for Bitcoin miners has deteriorated significantly throughout Q4 2025. Bitcoin’s price has declined sharply from its all-time high of approximately $124,485 reached on October 6 to roughly $86,000, a drop of nearly 31%. This price decline has crushed dollar-denominated mining revenue, pushing hashprice to approximately $37 per petahash per second per day, a level not seen consistently in five years.
At current economics, a substantial portion of the installed hashrate base is operating at or near breakeven. Assuming an average network electricity cost of $0.050 per kilowatt-hour and a fleet-wide efficiency of 29.5 joules per terahash, which is representative of industrial operations running Antminer S19j Pro units, profitability has become extremely thin. These mid-generation fleets account for a significant share of global hashrate, and current conditions are increasingly forcing them offline.
Hashrate Index’s latest mining economics projections estimate that another approximately 40 EH/s of marginal hashrate could drop offline from the current level of 1,065 EH/s purely due to unprofitability if Bitcoin prices remain around current levels. This suggests the hashrate decline may not be over, even absent further regulatory disruptions.
Winter Energy Costs Compound Miner Struggles
Mining margins face additional pressure from rising energy costs across North America. A recent cold snap spanning the Eastern Interconnection pushed grid operators including the Tennessee Valley Authority, Duke Energy, the South Carolina Public Service Authority, and Southern Company to near year-to-date peak demand levels. Associated Electric Cooperative in Missouri exceeded 80% of its annual peak demand.
For most of these regions, the rolling 12-month peak was set in late January, underscoring that winter rather than summer defines the true demand ceiling for power grids. This winter synchronicity compresses regional differences that typically provide relief during other seasons. Electric heating demand acts as a common forcing function that tightens supply across multiple balancing areas simultaneously, driving up spot electricity prices and forcing miners with flexible load agreements to curtail operations during the most profitable heating hours.
Many miners in Texas, Georgia, and the Carolinas participate in demand response programs that require them to power down during grid stress events in exchange for compensation. While these programs provide revenue diversity, they also mean that miners lose the ability to generate Bitcoin precisely when energy prices, and therefore mining economics, are at their worst for competitors who must keep running.
Difficulty Adjustment Offers Temporary Relief
The network’s self-correcting difficulty mechanism is providing some respite. Bitcoin mining difficulty currently stands at 148.2 trillion, just below its all-time high, but is projected to decline by approximately 3% at the next adjustment. This would mark the fourth consecutive negative adjustment, a streak unprecedented since the aftermath of the China mining ban in mid-2021.
For miners who remain operational, a lower difficulty means each terahash of computing power earns a slightly larger share of the block reward. However, at current hashprice levels, even a 3% reduction in difficulty is unlikely to materially change the profitability equation for operators running older hardware. The relief is incremental rather than transformative, buying time but not solving the fundamental margin compression.
Public Miners Navigate the Downturn
Major publicly traded mining companies are reporting mixed results as the year draws to a close. CleanSpark recently announced that it produced 622 BTC in December, bringing its calendar-year 2025 total to 7,746 BTC, representing a more than 10% year-over-year production increase. The company doubled its annual revenue to $766.3 million and reported net income of $364.5 million for fiscal year 2025, demonstrating that scale and operational efficiency can overcome headwinds.
Riot Platforms mined 516 BTC in December, up from 496 BTC in November, suggesting incremental capacity expansion. Marathon Digital Holdings continues to operate at a hashrate exceeding 54 EH/s, mining at sub-$40,000 energy costs per coin. These figures highlight the growing divergence between well-capitalized public miners with access to cheap power and efficient hardware, and smaller operators who are being squeezed out of the market.
JPMorgan’s recent sector reset underscored this divergence, upgrading Cipher Mining and CleanSpark while cutting price targets for Marathon and Riot. The investment bank’s analysis reflects a market that is increasingly rewarding diversification into AI and high-performance computing infrastructure while penalizing pure-play Bitcoin miners who lack alternative revenue streams.
Why This Matters
The current hashrate decline represents a significant stress test for the Bitcoin mining industry. The convergence of falling Bitcoin prices, Chinese regulatory enforcement, and seasonal energy cost pressures is creating a crucible that will determine which operators survive and which are forced to consolidate or exit. The three consecutive negative difficulty adjustments signal that the network is experiencing a meaningful reduction in security investment, though Bitcoin’s proof-of-work consensus mechanism is designed to handle exactly these cyclical downturns. For investors and industry participants, the key question is whether this represents a temporary seasonal correction or the beginning of a more prolonged restructuring of the global hashrate distribution. The migration of mining capacity from China to North America and other jurisdictions has been ongoing for years, but each disruption accelerates the trend and reshapes the competitive landscape.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Cryptocurrency mining involves significant risk, including the potential loss of capital. Readers should conduct their own research and consult with a qualified financial advisor before making any investment decisions. Past performance is not indicative of future results.
Jack Kong noting that the US and other jurisdictions stand to benefit from the displacement is the silver lining here. American mining operations with access to cheap stranded energy are about to see their share of global hashrate increase without spending a dime on expansion. The geopolitical reshuffling of hashrate continues.
The environmental angle is worth mentioning. Xinjiang mining operations were widely reported to rely on coal-powered electricity. If those 400,000 rigs are permanently offline rather than just relocated, the Bitcoin networks carbon intensity drops meaningfully. The hashrate moving to jurisdictions with hydro or renewable energy would be a net positive for the ESG narrative.
Three consecutive negative difficulty adjustments is the first such streak since July 2022. The projected 3% downward adjustment from 148.2 trillion will provide some relief, but at $37 per PH/s per day, only miners with electricity costs under $0.04 per kWh are profitable. This is a brutal efficiency filter that will consolidate hashrate among the best-capitalized operations.
The efficiency filter point is key. Post-halving block rewards at 3.125 BTC combined with hashprice near five-year lows means only ASICs newer than the S19 XP generation make economic sense. Older S19 and M30 series rigs are being powered off worldwide, not just in China.
The ESG impact depends entirely on whether those rigs stay offline or get smuggled to Kazakhstan or other jurisdictions with even dirtier energy. History suggests the latter. Miners do not just throw away hardware that still has positive marginal revenue.
400,000 machines going offline in Xinjiang is a staggering number. At an average of 250 TH/s per unit, that is roughly 100 EH/s of hashrate vanishing in essentially a single day. The fact that China had climbed back to third place globally at 14% of hashrate makes this especially dramatic. The network has survived worse during the 2021 migration but hashprice at $37 per PH/s per day near five-year lows means miners elsewhere are also feeling the squeeze.