Key Insights:
- Bitcoin mining difficulty fell 11.16% in the latest adjustment. It is the steepest correction since the 2021 China mining crackdown.
- Winter Storm Fern drove large-scale miner curtailments across US power grids. MARA alone has shut down 770 MW of capacity.
- Protocol data estimates an 11.57% increase in difficulty at the next retarget, signaling that hashrate returned quickly after the storm.
Bitcoin mining difficulty reset to 125,864,590,119,494.3 at block height 935,424. That marked an 11.16% decline from the previous epoch and the sharpest negative adjustment since July 2021. The difficulty drop reflected a sharp realized hashrate withdrawal over the prior 2,016 blocks.
Average block times climbed to roughly 12.4 minutes during the slow-block period. That forced the protocol’s built-in adjustment mechanism to ease mining difficulty back toward the 10-minute target.
Winter Storm Fern became a clear operational catalyst. MARA reported that it voluntarily curtailed about 770 MW across the ERCOT, PJM, and SPP grids. The company powered down nearly 70% of its global hashrate before the storm reached peak intensity.
ERCOT’s post-event report confirmed coordination with large customers “such as data centers and crypto facilities” for grid-reliability awareness during the storm.
The storm hit an industry already under economic pressure. BTC USD price briefly traded down to roughly $60,000 in early February before rebounding, compressing miner revenues sharply.
The hash price, calculated as the expected value of 1 TH/s of hashing power per day, hit record lows below $32 per PH/s during the selloff.
Bitcoin Mining Economics Shifted Temporarily
The -11.16% difficulty step-down translated into a multiplicative change factor of 0.888447. This adjustment mechanically increased the expected BTC mined per unit of hashrate. As a result, output per unit of hashrate rose by roughly 12.6% compared to the prior epoch.
The protocol’s official “settlement” of realized conditions over 2,016 blocks provided short-term profitability relief for miners who remained online.
That relief appeared fleeting. The Mempool.space difficulty-adjustment endpoint estimated the next retarget at block height 937,440 with an 11.57% increase. That implied a fast rebound in hashrate after the drop.
The estimated positive adjustment indicated that post-retarget block cadence accelerated beyond the 10-minute target. This trend was consistent with hashrate returning as storm conditions normalized. It also aligned with marginal machines coming back online. Bitcoin mining profitability remained sensitive to multiple variables.
Holding BTC USD price and fee rates constant, the difficulty decrease boosted expected BTC-per-TH by roughly 12.6%. However, if BTC/USD fell faster than that offset, or if power prices spiked, USD-denominated hashprice could still worsen.
Miner Capitulation Narrative Faces Complexity
The difficulty adjustment confirmed realized hashrate fell sharply, directionally consistent with miners powering down equipment. The drivers appeared non-mutually exclusive: margin compression from weak BTC USD price and large-scale weather-driven curtailments.
The estimated +11.57% next adjustment complicated a pure capitulation narrative. Prolonged balance-sheet distress typically keeps the hash rate suppressed longer, but the protocol data pointed to fast re-entry.
The adjustment pattern fit a “temporary outage plus tactical shutdowns” story better than a sustained washout. Bitcoin mining increasingly functioned as energy-plus-compute arbitrage rather than a pure BTC bet.
MARA’s 770 MW of curtailment shows that large miners can serve as a flexible load for grid operators. This suggests that hash rate volatility may be driven by grid economics and reliability events. It may not stem solely from cryptocurrency price action.
Network Hashrate Reversion Suggested Temporary Shock
The protocol printed the difficulty reset at block 935,424 with the new difficulty level and -11.16% step-down factor.
Multiple outlets described the adjustment as the sharpest negative change since the 2021 China mining crackdown era. During that period, historical data showed several large downside adjustments between May and July 2021.
The “tell” that the episode leaned more toward an outage than a capitulation came from the live estimate of a strong positive next retarget.
If the hashrate loss was mostly storm curtailment, difficulty likely mean-reverted upward quickly, consistent with the +11.57% estimate. If it were mostly economic failure, the rebound would be slower, and the next retarget estimate should drift down as blocks came in.
Bitcoin mining difficulty adjusts roughly every 2 weeks (2,016 blocks) to target approximately 10-minute blocks.
A sudden hashrate withdrawal first appeared as slower blocks, then as a discrete difficulty reset. The on-chain record was the -11.1553% prior retarget reading and the new difficulty level at height 935,424.
Industry Implications Extended Beyond Cryptocurrency
The difficulty drop redistributed mining rewards rather than creating universal winners. Miners who stayed online or could restart fastest captured a temporarily larger share of the fixed issuance pie. In contrast, miners forced offline by power, weather, or economic conditions lost market share until they returned.
Bitcoin mining operations faced increasing entanglement with energy market events and data center economics.
Mainstream financial commentary explicitly referenced a mining-to-AI infrastructure pivot, with Morgan Stanley’s estimates pointing to significant growth in AI power demand. They also highlight the possibility that repurposed mining sites could contribute meaningful gigawatts to the overall buildout.
The -11.16% difficulty reset at block height 935,424 confirmed a sharp realized hashrate withdrawal. However, the estimated +11.57% next retarget suggested that the shock was already reversing. The episode pointed to a mix of temporary curtailments and margin-driven shutdowns rather than a prolonged capitulation wave in Bitcoin mining.