According to Bitcoin Core developer Peter Todd, about 10% of the world's hashing power has been shut down in recent days.
This is likely a direct response to the market downturn that has squeezed miners' profit margins.
“Hashpower follows price pretty closely,” Todd explained on X (ex-Twitter).
Significantly reduced difficulty
Recent data shows that significant “minor capitulation” events have occurred in the past 90 days. The difficulty level rapidly decreased to 125.86 T and reached its climax.
For comparison, on November 11, the difficulty level locally peaked at 155.97 T.
The difficulty level is now so low that the remaining miners clear the block too quickly (8.92 minutes). This set the stage for a significant upward revision of 12.15% in two weeks.
plummeting profitability
Meanwhile, a key indicator of Bitcoin mining revenue has fallen to an all-time low, according to a recent report from Bloomberg. This is due to the combination of a collapse in virtual currency prices and a rise in energy costs.
The “hash price” index, which measures the revenue value per unit of computing power, has fallen to about 3 cents per terahash.
This collapse in profits forced major mining companies to power down their equipment.
The economic downturn is having a serious impact on the stock price performance of major mining companies. Major mining companies such as CleanSpark, Terawulf, MARA Holdings, and Riot Platforms have seen significant declines.
Severe winter storms across the United States are exacerbating the plight. They are negatively impacting major mining hubs such as Texas and Tennessee. In these states, rising power costs and power outages are forcing operators to reduce production.
