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Bitcoin’s hashrate experiences a decline in the first quarter for the first time in six years as miners shift focus to artificial intelligence.
The decline in the first quarter interrupts a prolonged trend of growth, but may ultimately foster decentralization as publicly traded U.S. miners risk losing their leading position.
The bitcoin mining hashrate experienced a decline in the first quarter. (Mark Agnor/Shutterstock)
Key points:
- Bitcoin’s hashrate has decreased by approximately 4% this year, marking the first decline in the first quarter since 2020, after a continuous period of five years with double-digit growth.
- As the economics of mining worsen, companies are shifting investments toward AI infrastructure, a transition that may lessen the concentration among major U.S. miners and enhance network decentralization.
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For the first time in six years, the bitcoin hashrate, which signifies the overall computational capacity securing the network, decreased during the first quarter. It is currently down about 4% year to date, remaining around 1 zettahash per second (ZH/s).
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Over the last five years, this rate has escalated from about 100 exahashes per second (EH/s), representing a tenfold increase, according to Glassnode data. Each year, this metric saw an increase during the first quarter and concluded with robust annual growth exceeding 10%. In 2022, it nearly doubled.
BTC Hashrate YoY (Glassnode)
The AI Pivot
The transition in 2026 indicates shifting economic conditions within the bitcoin mining industry. With production costs nearing $90,000 per bitcoin and the spot price approaching $67,000, profit margins are negative. Consequently, numerous publicly traded miners are transitioning to artificial intelligence and high-performance computing setups, which offer higher and more stable returns.
This change is being financed through debt issuance and bitcoin divestments, leading to decreased reinvestment in bitcoin mining. As a result, hashrate expansion is increasingly influenced by the cryptocurrency’s market price, with lower prices potentially prompting further reductions as smaller miners withdraw.
While a declining hashrate might raise questions about network security, the importance of decentralization may surpass that of sheer size. Publicly traded U.S. miners have represented over 40% of the global hash rate, and a decrease in their dominance could result in a more geographically diverse network. In this regard, the current transition may ultimately enhance decentralization.
Despite the slowdown, CoinShares continues to project hashrate growth to approximately 1.8 ZH/s by the close of 2026, contingent on bitcoin recovering toward $100,000.
Read More: End of bitcoin ‘HODL’: public miners going all-in on AI, signaling more BTC selling
