Bitcoin hashprice drops to a two-year low as AI shifts create divisions among miners.

Record difficulty levels and decreasing on-chain fees have driven Bitcoin mining profitability to its lowest point in two years, resulting in a growing disparity between miners operating on minimal margins and those transforming into data-center operators to capitalize on the AI surge.

The mining sector, once a uniform industry aligned with Bitcoin’s price movements, is now transitioning into a dual-speed economy where success is determined by hashpower rather than energy strategies.

Currently, Bitcoin’s hashprice, which refers to miner revenue per unit of computational power, stands at approximately $42.14 per terahash per day, placing it in the lowest 4% of its two-year range.

In just the past month, it has decreased by 19%, while the broader market’s decline in Bitcoin to around $101,500 has intensified the pressure.

Graph illustrating Bitcoin’s hashprice from Aug. 5 to Nov. 5, 2025 (Source: Hashrate Index)

The primary issue isn’t the spot price.

It lies in the fundamental dynamics of the network: difficulty has increased by 31% over the last six months, while hashrate has risen by 23%, and fees, previously supported by ordinal activity and congestion, have diminished to their lowest levels since spring. This has resulted in significant compression, with more machines competing for fewer rewards.

This combination is particularly detrimental for smaller miners. Many are operating below break-even points, especially those bound by high-cost electricity contracts or utilizing older hardware. The current scenario bears a striking resemblance to previous cycle lows in 2020 and late 2022, when the weakest participants capitulated just before a market rebound.

However, this time, the stress test is occurring in a markedly different context: the emergence of AI and high-performance computing has provided a new outlet for miners, enabling them to shift their infrastructure towards non-Bitcoin workloads.

Earlier this week, Iris Energy revealed a $9.7 billion, five-year agreement with Microsoft to provide AI and data-center capacity, effectively transforming part of its fleet into a high-performance computing provider. The market response was immediate, prompting brokers to reassess IREN, Core Scientific, Riot Platforms, and Cleanspark as “AI infrastructure plays” rather than mere Bitcoin proxies.

This transition, grounded in genuine revenue diversification, explains why miner equities can rise even as hashprice declines. The market is starting to favor grid-scale flexibility and long-term power contracts over hash output.

The contrast with traditional miners is pronounced. Companies that remain solely focused on Bitcoin production have limited options when margins shrink.

Miner earnings have now reached their lowest profitability levels since April, with hashprice figures around $43 per PH/s/day nearing multi-month lows. These firms continue to receive their income exclusively from Bitcoin block rewards and transaction fees, which decrease automatically with each rise in difficulty.

Unless they can hedge their exposure or access extremely low-cost energy, they are left waiting for the next block subsidy relief or a surge in network fees.

Marathon Digital, on the other hand, is demonstrating how scale can mitigate the pressure. The company recently reported a record quarterly profit of $123 million by enhancing operational efficiency and exploring new business avenues related to AI hosting.

Its revenue composition now includes both mining and AI operations, illustrating the evolving definition of a miner. Marathon’s extensive energy footprint allows it to opportunistically curtail or redirect load, selling excess power or leasing infrastructure for high-performance computing tasks when Bitcoin mining economics become challenging.

The divergence is now evident in market data: equity investors are perceiving hashprice weakness not as an existential threat, but as a filter distinguishing miners with sustainable business models from those merely pursuing block rewards.

As noted in Bernstein’s latest report, “hashprice pain won’t impact AI-pivot miners.” This sentiment reflects the structural transformation underway, indicating that Bitcoin mining is transitioning from a singular pursuit into a multi-market data infrastructure enterprise.

Identifying potential indicators for a turnaround: several clear signals.

The first is a plateau or decline in difficulty, indicating that unprofitable hashrate is exiting the market, leading to a natural rebalancing that increases the share of rewards for remaining miners.

The second is a revival in on-chain fees, whether due to congestion or a new wave of inscription-style demand. Either scenario can elevate hashprice without any alteration in Bitcoin’s price.

The third, and perhaps most significant, trigger is the ongoing growth of AI or HPC contracts. Each new megawatt allocated to external workloads diminishes effective competition on the Bitcoin network, stabilizing margins for those who remain.

Other factors are also significant: winter energy prices, curtailment incentives, and regional regulations all affect who can endure an extended period of economic strain. Mergers, liquidations, and site closures typically accelerate when hashprice approaches its cycle lows.

Historically, this has served as a contrarian signal for the broader market, often preceding difficulty adjustment relief and renewed miner accumulation.

The next difficulty increase will provide the first real assessment of whether this compression has reached its limit. If hashrate growth stagnates while fees increase, hashprice could begin a gradual mean reversion towards equilibrium.

Until then, the mining sector remains divided between those navigating Bitcoin’s most challenging mathematical problems and those entirely redefining it through AI.

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