Bitcoin miners are staring down a profitability squeeze after a punishing stretch that pushed expected revenue per unit of computing power to a record low. Data from Luxor’s Hashrate Index shows that the average USD hashprice in December 2025 fell to $37.89 per petahash per second per day, a new all-time low for the metric. Alongside a notable drop in network difficulty in early February 2026, the data points to mounting pressure on operators facing high electricity costs and weaker fee revenue.
Hashprice Hits Record Low as Revenue Shrinks
The single most telling indicator of miner distress is the hashprice, a metric that captures how much revenue a miner can expect from one petahash per second of computing power over a 24-hour period. Luxor, a major mining pool and derivatives platform, reported that the December 2025 average of $37.89 per PH/s/day set a new all-time low. Luxor attributed the decline to a weaker bitcoin price environment and low transaction fees, which together eroded the two primary revenue streams miners depend on. For operators that financed large expansions during more profitable years, the sudden compression in income can force painful cost cuts, renegotiations with lenders, or, in some cases, liquidation of hardware.
To understand why this metric matters, consider how it is built. The Luxor methodology uses a 144-block lagging simple moving average for fees, averages the BTC spot price across three U.S.-based exchanges, and pulls difficulty and block subsidy values directly from on-chain data. That construction is designed to track miner economics using on-chain data inputs alongside fee and price averages, rather than relying on a single-point estimate. When it drops to record lows, it suggests the gap between what miners spend on power and hardware and what they earn from block rewards and fees has narrowed sharply, and may vanish entirely for less efficient operations. Hashprice therefore acts as an early-warning gauge for industry stress, often foreshadowing shutdowns, mergers, and distressed asset sales.
Difficulty Plunge Signals Widespread Rig Shutdowns
A second data point reinforces the severity of the downturn. Bitcoin’s network difficulty, which adjusts roughly every two weeks to reflect how much computing power is active on the chain, dropped sharply in early February 2026. According to YCharts data, the average difficulty stood at approximately 141.67 trillion on February 6, 2026, then fell to about 125.86 trillion by February 9 through 11. That represents a decline of roughly 11 percent in a matter of days, a steep move by historical standards. Such a rapid adjustment can indicate that a meaningful portion of mining capacity powered down in a short window, rather than a slow attrition spread over months.
Difficulty adjustments are a built-in feedback loop in Bitcoin’s design. When miners switch off their rigs because operating costs exceed revenue, the total hash rate on the network falls, and the protocol responds by lowering difficulty so that blocks continue to be found at a roughly ten-minute interval. The February shift is consistent with a meaningful share of mining capacity going offline. For the miners who remain, lower difficulty temporarily improves per-unit revenue because each surviving machine claims a larger share of block rewards. But that relief is partial at best when the underlying bitcoin price and fee environment remain depressed, and it can be quickly erased if sidelined miners return as soon as conditions improve, pushing difficulty back up.
Energy Costs Dwarf Shrinking Returns
The profitability squeeze is especially painful because the mining industry’s power consumption is enormous. The Cambridge Centre for Alternative Finance, in its Digital Mining Industry Report, estimated that Bitcoin mining consumes around 138 terawatt-hours of electricity per year, a figure derived from a survey covering about 48 percent of global mining activity. To put that in perspective, 138 TWh is comparable to the annual electricity use of some countries. Even at wholesale industrial power rates, the aggregate cost runs into billions of dollars annually, and those costs are largely fixed in the short term because miners sign long-term contracts or invest in dedicated infrastructure tied to specific energy sources.
When hashprice was higher, those energy bills were manageable for well-capitalized operations. At $37.89 per PH/s/day, the math changes. Miners running older-generation ASICs with lower efficiency ratings face electricity costs that can exceed their daily bitcoin earnings, especially in regions where power prices have risen due to fuel volatility or grid constraints. The result is a forced choice: absorb losses and hope for a price recovery, or shut down and wait. The February difficulty drop is consistent with many choosing the latter. Smaller and mid-tier operators, particularly those locked into fixed-rate power contracts at less favorable terms, are the most exposed. Large publicly traded miners with access to capital markets and newer hardware have more room to endure a prolonged slump, but even they are not immune when the revenue floor keeps falling and investors grow wary of funding cash-burning operations.
Green Miners May Outlast the Squeeze
One outcome that the current data suggests, though does not yet confirm, is that the shakeout could accelerate consolidation toward miners with access to low-cost sustainable energy. The Cambridge report noted a rising share of sustainable energy in the mining mix, and operators who locked in cheap hydroelectric, solar, or wind power contracts years ago now hold a structural cost advantage. Their marginal cost per bitcoin mined is lower, which means they can survive at hashprice levels that force fossil-fuel-dependent competitors offline. In some cases, miners co-located with stranded or curtailed renewable generation can negotiate exceptionally low tariffs because they help monetize energy that would otherwise go unused.
This dynamic differs from previous mining downturns. In earlier cycles, the survivors were simply the largest operators with the deepest pockets. The current environment adds an energy-cost dimension that rewards source selection, not just scale. If the difficulty continues to adjust downward as less efficient miners exit, the remaining green operators could see their per-unit economics stabilize faster than the headline hashprice would suggest. That does not mean the industry is healthy. It means the pain is unevenly distributed, and the miners best positioned to weather it are those who treated energy procurement as a competitive weapon rather than a commodity expense. Over time, that could reshape the geography of mining, favoring jurisdictions with abundant renewables, supportive regulation, and robust grid infrastructure.
What Prolonged Low Hashprice Means for the Network
The broader risk extends beyond individual mining companies. Bitcoin’s security model depends on a large, distributed pool of miners competing to validate transactions. When profitability falls and some hash rate goes offline, the network can become more concentrated among fewer operators. That concentration does not immediately threaten a 51 percent attack, but it does reduce the redundancy that makes Bitcoin resistant to censorship and manipulation. The February difficulty adjustment, while functioning as designed, is a symptom of reduced participation that security researchers and long-term investors watch closely as a barometer of systemic resilience.
If low hashprice persists, several second-order effects are likely. First, capital for new mining projects could dry up, slowing hardware upgrades and leaving more of the network secured by aging machines that are easier to displace if energy prices move against them. Second, miners may seek to diversify revenue by offering auxiliary services such as high-performance computing or grid-balancing, but those pivots are complex and not guaranteed to succeed. Finally, the economic pressure on miners could influence protocol-level debates over transaction fee dynamics and block space usage, as developers and stakeholders weigh how to ensure that security budgets remain robust once block subsidies decline further. For now, the combination of record-low hashprice, falling difficulty, and towering energy costs underscores how tightly Bitcoin’s technical health is bound to the real-world economics of running its machines.
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*This article was researched with the help of AI, with human editors creating the final content.
Grant Mercer covers market dynamics, business trends, and the economic forces driving growth across industries. His analysis connects macro movements with real-world implications for investors, entrepreneurs, and professionals. Through his work at The Daily Overview, Grant helps readers understand how markets function and where opportunities may emerge.
