Bitcoin miners face profitability headwinds as network hash rate declines and difficulty is set to adjust downward.
Bitcoin (BTC) mining is facing renewed strain as the hash rate dropped below a crucial threshold not seen since late 2025. One expert believes that AI demand and manufacturer-led expansion are reshaping network participation.
StandardHash CEO and founder Leon Lyu warned of a major change unfolding in the Bitcoin mining landscape after the network’s seven-day average hash rate fell below 1 ZH/s for the first time since September last year.
Miners Retreat
In a post on X, Lyu stated that the decline indicates mounting pressure on miner profitability, while a negative difficulty adjustment of approximately 4.34% is expected in roughly three days. He attributed the drop to several structural factors, including large mining firms reallocating power capacity away from Bitcoin mining toward artificial intelligence compute services in pursuit of higher margins.
Lyu also highlighted the growing influence of mining hardware manufacturers, as he noted that Bitdeer is aggressively deploying its own proprietary rigs and is gearing up to become the largest North American miner by hash rate.
Additionally, he said Bitmain appears to be expanding its own mining footprint through secondary channels and partnerships, even as the overall network hash rate trends lower.
Lyu’s comments come at a time when the competition for energy has intensified between BTC miners and artificial intelligence data centers. In recent years, several publicly listed mining firms have disclosed plans to repurpose or co-locate mining infrastructure for high-performance computing and AI workloads.
At the same time, grid operators and regulators in the US and Europe have flagged rising power demand from AI data centers, which often secure long-term electricity contracts. Industry reports have shown that AI facilities typically generate considerably higher revenue per megawatt than Bitcoin mining, which has increased pressure on miners during periods of low hashprice. This trend has accelerated power reallocation decisions across energy-constrained regions.
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BTC Mining’s Toughest Year
These developments follow a difficult year for Bitcoin miners. In December, TheMinerMag observed that the BTC mining industry faced one of its toughest periods last year. The publication said miners were dealing with the “harshest” profit margins in the industry’s 15-year history. In 2025, even large, publicly listed companies struggled to cover costs. Mining revenue fell sharply as hashprice, which measures earnings from computing power, dropped from about $55 per unit to around $35.
The report described this level as a long-term low rather than a short-term decline. The situation worsened after BTC’s price fell from its record high of nearly $126,000 in October, which put further pressure on already-strained mining operations.
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