Foreign media reports indicate that the Bitcoin network is nearing its first annual mining difficulty decline in 17 years, but this outcome is not yet finalized. The network is expected to undergo five more rounds of automatic adjustments by the end of the year, and if the price of Bitcoin recovers and some mining rigs come back online, the year-end difficulty could still be higher than the 2025 level.
Miner costs are higher than spot prices
The report, citing estimates from onchainmind, states that the average cost of mining one Bitcoin is currently around $76,100, while the spot price of Bitcoin is hovering around $65,000, meaning miners are generally operating at a loss.
The article states that Bitcoin prices have fallen by approximately 26% this year, leading to a significant decrease in industry revenue and prompting some miners to shut down their equipment. The high temperatures in Texas during the summer and the increased electricity costs due to the February storm also accelerated the shutdown of mining operations.
- The average cost of mining is approximately $76,100.
- The spot price of Bitcoin is approximately $65,000.
- The total network computing power has dropped by nearly 20% from its peak.
Difficulty reduction corresponds to miner clearing
After the computing power declines, the Bitcoin network will automatically adjust the mining difficulty to reduce competitive pressure on the remaining miners. The article argues that this indicates the network is still operating according to its established mechanisms, alleviating the operational pressure on low-cost miners.
The report also mentioned that the on-chain metric Puell Multiple has fallen to a lower percentile. According to the report, this typically corresponds to a period of pressure on miners and the clearing out of inefficient capacity. Similar phases have often occurred when the market is near a temporary bottom.
Mining companies are increasingly reliant on AI businesses.
However, the article also emphasizes that the current year's difficulty level has not yet been finalized. Even if the difficulty level rises again after several rounds of adjustments, this round of changes already indicates that the mining landscape is shifting.
The report argues that while the Bitcoin network can mitigate miner profit pressures through difficulty adjustments, the financial stability of mining companies is increasingly being impacted by AI-related computing power leasing businesses. The performance of some mining companies no longer depends solely on the price of Bitcoin and block rewards.
