Bitcoin Mining Difficulty Plunges 11% in Historic Adjustment as US Winter Storms Cripple Operations

The Bitcoin network completed one of the most significant mining difficulty adjustments in its history on February 8, 2026, when the protocol slashed difficulty by 11.16% to 125.86 trillion at block height 935,424. The dramatic downward adjustment — the largest single decrease since China’s sweeping mining ban in the summer of 2021 — was triggered by a sharp collapse in network hashrate caused by severe winter storms that devastated major mining operations across the United States.

TL;DR

• Bitcoin mining difficulty dropped 11.16% on February 8, the largest adjustment since China’s 2021 mining ban
• Severe US winter storms knocked major mining facilities offline, pushing hashrate from over 1 ZH/s down to approximately 826 EH/s
• Foundry USA, the largest mining pool, saw its hashrate nearly halve from 400 EH/s to around 198 EH/s
• Hashprice collapsed to multi-year lows near $23.9 per PH/s per day, squeezing miner profitability
• BTC trades around $68,000, roughly 12-20% below estimated average production costs of $77,000-$87,000

Storms Ravage US Mining Infrastructure

The catalyst for the historic difficulty drop was a brutal series of winter storms that swept through the central and southeastern United States in late January and early February 2026. Texas and Georgia, home to some of the largest Bitcoin mining facilities in the world, bore the brunt of the extreme weather. Grid operators across ERCOT and Southern Company territories issued emergency curtailment orders, forcing industrial-scale power consumers — including Bitcoin miners — to shut down operations to protect residential electricity supply.

Publicly traded mining companies were among the hardest hit. MARA Holdings, Riot Platforms, and CleanSpark all announced operational scalebacks or complete shutdowns as freezing temperatures, ice accumulation, and power grid instability made continued mining operations impossible. Core Scientific, which operates massive facilities in Texas and Georgia, reported that several of its data centers went dark as utility providers prioritized grid stability over industrial demand.

The cumulative effect on network hashrate was staggering. After hovering near 1 zettahash per second (ZH/s) through late 2025 and early January 2026, the network hashrate plummeted to as low as 826 EH/s — a decline of roughly 18% from its peak. Some estimates suggested the actual low was even more severe, potentially dipping below 700 EH/s during the worst of the outages before recovering partially as facilities in unaffected regions ramped up operations.

Foundry USA Pool Takes the Biggest Hit

Foundry USA, the dominant Bitcoin mining pool controlling approximately 30% of global hashrate, experienced the most dramatic contraction. The pool’s hashrate collapsed from nearly 400 EH/s to approximately 198 EH/s — a roughly 50% decline that single-handedly accounted for a significant portion of the overall network hashrate drop. Foundry’s outsized influence meant that its operational disruption rippled across the entire Bitcoin network, accelerating block times and triggering the protocol’s built-in difficulty adjustment mechanism.

Other major pools including AntPool, F2Pool, and ViaBTC also reported reduced hashrate contributions as their participating miners across North America went offline. However, pools with greater geographic diversification — particularly those with significant operations in Latin America, the Middle East, and Central Asia — experienced more modest declines, cushioning the overall network impact.

Miner Economics Enter the Red Zone

The difficulty drop coincided with an already dire profitability environment for Bitcoin miners. Hashprice — the daily revenue earned per petahash of computing power — had collapsed to approximately $23.9 per PH/s per day, near multi-year lows and representing a roughly 66% decline from the October 2025 peak of around $70 per PH/s per day when Bitcoin traded near $126,000.

The squeeze stems from a brutal combination of factors. Bitcoin’s price has fallen approximately 46% from its October 2025 highs to around $68,000, while the April 2024 halving continues to weigh on per-block revenue with miners now earning just 3.125 BTC per block plus transaction fees. For miners operating with older-generation hardware or electricity costs above $0.05 per kWh, the math is unforgiving: production costs are estimated at $77,000 to $87,000 per Bitcoin, meaning many operators are mining at a loss.

JPMorgan’s crypto research team, led by Nikolaos Panigirtzoglou, estimates the industry-wide average production cost at approximately $77,000, reflecting the difficulty relief before the most recent spike. On-chain analytics firm Checkonchain places the figure even higher at $87,000. Only the most efficient miners — those with sub-$0.05/kWh power contracts and latest-generation S21-class ASIC hardware — can produce Bitcoin profitably at current prices.

Difficulty Drop Provides Temporary Relief

The 11.16% difficulty decrease offers a lifeline to struggling miners, at least temporarily. With lower difficulty, each unit of computing power earns proportionally more Bitcoin, improving margins for operations that managed to stay online through the storms. For every petahash of hashrate, the expected daily Bitcoin reward increases by roughly 12.5%, directly offsetting some of the hashprice compression.

However, the relief is expected to be short-lived. As storm-damaged facilities come back online and hashrate recovers — which is already happening rapidly — the network protocol will adjust upward again. Within days of the downward adjustment, hashrate was already climbing back toward the 1 ZH/s mark, setting the stage for what could be an equally dramatic upward correction at the next adjustment period around February 19.

Industry Diversification Accelerates

The crisis is accelerating an existing trend among major mining companies to diversify their revenue streams beyond pure Bitcoin mining. Several large operators are converting portions of their facilities to support AI and high-performance computing (HPC) workloads, which offer more stable and predictable revenue compared to the volatile economics of cryptocurrency mining.

Canaan Inc., one of the world’s leading ASIC manufacturers, released its February 2026 production update showing that while total mining output declined due to the weather disruptions, the company continued to expand its operational capacity. Other mining firms are pursuing strategic acquisitions in the AI infrastructure space, betting that the convergence of energy-intensive computing — whether for Bitcoin mining or artificial intelligence — will define the next phase of the industry.

Why This Matters

The 11% difficulty drop is not merely a technical event — it is a stark reminder of the vulnerabilities inherent in Bitcoin’s increasingly concentrated mining geography. With the United States accounting for an estimated 35-40% of global hashrate, extreme weather events can now move the needle on network-wide metrics in ways that were unimaginable just a few years ago. The speed of the hashrate recovery — measured in days rather than weeks — demonstrates how industrialized and responsive the mining sector has become, but it also highlights the systemic risk of geographic concentration.

For miners, the current environment represents a classic capitulation scenario. When the price of Bitcoin falls below the cost of production, the least efficient operators are forced to shut down, hashrate drops, difficulty adjusts downward, and the surviving miners capture a larger share of the block rewards. This self-correcting mechanism has played out multiple times throughout Bitcoin’s history, and each cycle consolidates the network into fewer, more efficient hands. The question now is whether the miners who survived the storm can also survive the price slump — and whether the forthcoming difficulty increase will push more operators over the edge.

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.