Bitcoin Hashrate Drops 4%, History Favors Price Rally After Miner Stress

Bitcoin hashrate fell 4% over the 30 days leading up to December 15, a move that analysts say has often marked favorable conditions for price performance in the months that follow. According to VanEck, sustained drops in hashrate have repeatedly lined up with periods where Bitcoin delivers stronger forward returns.

In a recent report, VanEck crypto research lead Matt Sigel and senior investment analyst Patrick Bush pointed to long term data showing that miner stress can act as a contrarian signal. Since 2014, Bitcoin has posted positive 90 day returns 65% of the time when hashrate declined over the prior month. That compares with a 54% win rate when hashrate increased.

The trend becomes clearer over longer windows. When 30 day hashrate growth was negative, Bitcoin delivered positive returns over the following 180 days 77% of the time, with an average gain of 72%. When the metric was rising, the success rate dropped to 61% over the same time.

Bitcoin is currently trading near $87,600, down close to 30% from its October peak of $126,080, according to CoinMarketCap.

Bitcoin Miner Pressure Builds

The recent drop in Bitcoin hashrate points to rising pressure on miners. Sigel and Bush noted that the breakeven electricity cost for a 2022 era Bitmain S19 XP miner has fallen sharply. In December 2024, the breakeven level sat near $0.12 per kilowatt hour. By mid December this year, it had dropped to about $0.077 per kilowatt hour, a decline of nearly 36%.

This shift shows how narrow margins have become across the mining sector. The analysts said the 4% hashrate drop was the steepest since April 2024 and was likely driven by the shutdown of roughly 1.3 gigawatts of mining capacity in China. As less efficient rigs go offline, network difficulty can ease, improving conditions for miners that remain active.

Higher prices following these periods have historically helped restore margins and, in some cases, brought sidelined miners back online.

Power Moves Elsewhere, State Support Remains

VanEck also noted that some of the power leaving Bitcoin mining may not return. The analysts estimate that rising demand from AI data centers could permanently absorb capacity equal to as much as 10% of the Bitcoin hashrate.

Even so, Bitcoin mining continues to receive backing at the state level in several regions. Sigel and Bush estimate that up to 13 countries now support mining operations in some form. These include Russia, France, Bhutan, Iran, El Salvador, the UAE, Oman, Ethiopia, Argentina, Kenya, and more recently Japan.

While miner exits have weighed on sentiment in recent weeks, past cycles show that periods of Bitcoin hashrate weakness have often led to price rallies.