Bitcoin's mining difficulty has dropped roughly 19% from its November 2025 peak, the steepest decline since China banned mining in 2021. Miners squeezed by sub-$65,000 prices and post-halving economics sold over 32,000 BTC in Q1 2026 and are shifting facilities toward AI hosting.
Bitcoin's mining difficulty has fallen roughly 19% from its November 2025 peak, a decline unmatched since China forced miners out of the country in 2021. The metric, which resets every 2,016 blocks to keep block production steady, dropped from approximately 155.97 trillion to 126.23 trillion at the July 25, 2026 adjustment. That marks only the second time in Bitcoin's history that difficulty has fallen below where it stood a year earlier — the first came during the China exodus.
What's driving the drop
Bitcoin has been trading consistently below $65,000, squeezing margins for operators already coping with the April 2024 halving that cut block rewards from 6.25 BTC to 3.125 BTC. Two recent adjustments show the pace of the slide: difficulty dropped 5% on July 11, then fell another 0.74% on July 25. Those moves followed a string of negative adjustments through June and July that together mark the third-steepest decline of the ASIC mining era.
Network hashrate had slid to approximately 868 EH/s by July 29.
Miners sell coins and pivot to AI
Public mining companies, including Hut 8, Core Scientific, and TeraWulf, sold over 32,000 BTC in the first quarter of 2026 alone just to cover operating costs. Many are repurposing their power contracts and cooling infrastructure for artificial intelligence and high-performance computing workloads. Core Scientific has been among the most aggressive, already converting significant capacity toward AI hosting.
A slower squeeze than 2021
The 2021 China ban wiped out roughly half of Bitcoin's hashrate almost overnight, but hashrate fully recovered within about six months as miners relocated to the US, Kazakhstan, and elsewhere. This time, sustained economic pressure rather than a single regulatory shock is behind the decline. A sustained move above $65,000 could stabilize the remaining mining operations and slow the exodus.
Source: Crypto Briefing
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