Bitcoin Hash Rate Records the Sharpest Decline in Nearly Two Years

Over the last month, Bitcoin’s hash rate, which measures the computing power securing the network, has declined by roughly 4%. This is the steepest decline seen in nearly two years and aligns with recent weakness in price action.

Although hash rate movements may appear purely technical, they often signal deeper market stress. It points to growing pressure on miners and short-term holders, while long-term holders appear less affected.

Bitcoin Mining Pressure

Bitcoin’s hash rate decline has mirrored a challenging stretch for price performance. Over the past month, BTC has been down about 9%, while short-term volatility has increased. Thirty-day realized volatility is now above 45%, a level last seen in early 2025. Large price swings make mining less attractive when margins are already tight.

VanEck’s mid-December 2025 Bitcoin ChainCheck report shows the hash rate fell 4%, the biggest drop since April 2024. Analysts Matthew Sigel and Patrick Bush note that hash rate pullbacks often happen during sharp price corrections. Lower prices reduce miner revenue, especially for those with older equipment or higher power costs.

The numbers highlight the pressure. The breakeven electricity cost for a 2022 Bitmain S19 XP miner has dropped from $0.12 in late 2024 to about $0.077 this month. That is a 36% decline in one year. Transaction fee revenue is also down around 14% month over month, and new address growth has slowed slightly.

Still, many miners remain active. VanEck estimates that up to 13 countries now support Bitcoin mining through state-backed energy programs, helping keep the network stable during difficult periods.

How China’s Shutdowns Affect Bitcoin Mining?

Price declines are only one aspect of the current situation. In China, around 400,000 mining machines in Xinjiang went offline due to power adjustments and policy enforcement.

This shutdown cut an estimated 1.3 gigawatts of capacity almost immediately. Consequently, China’s contribution to global hash power dropped by roughly 100 exahashes per second within a day, representing close to 10% of the total network.

Still, such disruptions tend to be temporary. Mining hardware is usually relocated, resold, or brought back online under different agreements. During these transitions, the hash rate can appear weaker than the long-term reality.

Similar events have occurred before. Outages, regulatory updates, and energy reallocations toward AI facilities have led to short-term declines. Over time, Bitcoin’s difficulty adjustment balances these effects.

Past Trends Hint at a Potential Rebound

VanEck sees the recent drop in hash rate as a possible contrarian signal. Historically, falling hash rates often happen during late-stage selling, not the start of a long downturn.

Since 2014, when 90-day hash rate growth turned negative, Bitcoin’s 180-day forward returns were positive 77% of the time, with an average gain of 72%. At other times, returns averaged around 48%. Short-term data show a similar pattern. When the hash rate fell for over 30 days, 90-day forward returns were positive about 65% of the time.

On-chain data supports this. Coins held for one to five years have fallen, especially in the two-to-three-year range. Coins held for more than five years have stayed mostly steady. Long-term holders are holding on, while miners and newer holders feel pressure.

Corporate activity moves against the trend. Spot Bitcoin ETP holdings fell slightly, but corporate treasuries added about 42,000 BTC from mid-November to mid-December. Strategy added 29,400 BTC. Other firms are exploring preferred shares rather than common stock for future buying.

What Could It Mean Going Forward?

The recent fall in Bitcoin’s hash rate points to short-term pressure on miners and new investors but does not signal a major breakdown. Past trends show these declines often lead to stabilization and possible recovery, as long-term holders are largely unaffected. Continued corporate accumulation and steady network activity also reflect confidence in Bitcoin’s long-term potential.