Bitcoin Hashrate Decline Raises Hopes of a Price Bottom
Bitcoin’s network hashrate fell roughly 4% over the 30 days to Dec. 15, a move that VanEck analysts believe could point to a potential market bottom for BTC.
According to VanEck crypto research lead Matt Sigel and senior investment analyst Patrick Bush, sustained hashrate compression has historically acted as a bullish contrarian indicator, often preceding periods of positive price performance.
“When hash rate compression persists over longer periods, positive forward returns tend to occur more often and with greater magnitude,” the analysts wrote.
Historical Data Supports a Bullish Interpretation
VanEck’s analysis of Bitcoin data dating back to 2014 shows a clear statistical trend:
- When Bitcoin’s hashrate declined over a 30-day period, 90-day forward returns were positive 65% of the time
- When hashrate increased, positive returns occurred only 54% of the time
Looking further ahead strengthens the case:
- Negative 90-day hashrate growth was followed by positive 180-day returns 77% of the time
- Average gains during those periods reached 72%, outperforming scenarios where hashrate increased
These figures suggest miner capitulation often marks periods of stress that later resolve with stronger price action.
Miner Economics Under Severe Pressure
The recent hashrate decline reflects increasingly difficult conditions for Bitcoin miners.
VanEck noted that the breakeven electricity cost for a 2022-era Bitmain S19 XP miner — one of the industry’s most widely used rigs — has dropped nearly 36%, from $0.12 per kilowatt-hour (kWh) in December 2024 to around $0.077/kWh by mid-December.
This sharp decline highlights how compressed margins have forced less efficient miners offline.
China Shutdowns Drive Recent Hashrate Drop
Sigel and Bush attributed much of the recent hashrate decline to the shutdown of approximately 1.3 gigawatts of mining capacity in China, marking the sharpest hashrate contraction since April 2024.
They added that some of this energy capacity could be redirected toward artificial intelligence workloads, a trend that could ultimately remove up to 10% of Bitcoin’s hashrate if it accelerates.
Price Recovery Would Ease Miner Pain
Bitcoin is currently trading around $88,000, nearly 30% below its October all-time high near $126,000.
A price recovery would:
- Expand miner profitability margins
- Bring previously unprofitable rigs back online
- Reduce forced selling pressure from miners
Historically, these dynamics have helped stabilize the market after prolonged drawdowns.
Nation-States Continue to Support Bitcoin Mining
Despite the pressure on miners, VanEck emphasized that state-level support for Bitcoin mining remains intact.
The firm estimates that at least 13 countries are actively backing mining operations, including:
- Russia
- France
- Bhutan
- Iran
- El Salvador
- UAE
- Oman
- Ethiopia
- Argentina
- Kenya
- Japan
This continued geopolitical backing reinforces the long-term resilience of Bitcoin’s mining ecosystem.
Capitulation as a Reset, Not a Collapse
Rather than signaling systemic weakness, miner capitulation often acts as a market reset — flushing out inefficient operators while strengthening the network’s long-term fundamentals.
If historical patterns hold, the recent hashrate decline may represent less a warning sign and more an early indication that Bitcoin’s next phase could be forming beneath the surface.
Final Paragraph — KXZ Store Promotion
As Bitcoin’s market cycles continue to evolve, access to reliable digital services remains essential in the broader digital economy. If you’re looking to buy global gift cards or top up your favorite games quickly and securely, explore KXZ Store — offering competitive pricing, instant digital delivery, and a smooth experience for users worldwide.