“Hashrate”, known as the total processing power that secures the Bitcoin network, decreased in the first quarter of this year for the first time in six years. Currently, the hashrate is hovering around 1 zettahash/second, with a loss of approximately 4 percent on an annual basis.
Economic conditions are changing in Bitcoin mining
Over the last five years, Bitcoin hashrate has increased 10x from around 100 exahash/second to today. Historically, there has been an increase in the first quarter of each year, with annual total growth exceeding 10 percent. The rise in 2022 attracted attention by almost doubling throughout the year.
However, it seems that the economic dynamics in the sector have changed as of 2026. It is currently calculated that the Bitcoin production cost is approaching 90 thousand dollars and the market price is well below this, around 67 thousand dollars. This situation has led to a serious contraction in miners’ profit margins.
Miners are turning to new areas
Due to the decrease in profits, especially large publicly traded mining companies are changing their strategies. By turning to artificial intelligence applications and high-performance computing services, they aim to achieve more stability and higher returns in these areas. This transformation from mining is being financed by companies through debt and Bitcoin sales. This causes reinvestments in Bitcoin mining to decrease.
This change in the industry causes hashrate to become more sensitive to Bitcoin price. It is reported that if prices continue to remain under pressure, small-scale miners may leave operations. Thus, there is a possibility that the decline in hashrate will continue.
Although the decline in hashrate raises questions about network security from time to time, another perspective in the industry also attracts attention. Not only the total size of the network, but also its distribution across different geographies is important.
In recent years, US-based publicly traded mining companies held more than 40 percent of the global hashrate. As the weight of these companies decreases, hashrate is expected to spread to more different countries and companies. Such a development could contribute to the reduction of centralization.
According to Glassnode data, hashrate has increased from 100 exahash/second to 1 zettahash/second in the last five years, and the increase was observed in the first quarter of each year. This year, for the first time, there was a decline in the same period.
