Bitcoin Network Faces AI Mining Competition as Hashrate Retreats Below 1,000 EH/s

The Bitcoin network’s computational power has reached its lowest point since mid-September, with hashrate sliding below 1,000 exahash per second (EH/s). This represents a significant 15% decline from the October peak of 1,157 EH/s. The pullback reflects a fundamental market shift: miners are increasingly redirecting their resources toward AI mining and high-performance computing operations, leaving the Bitcoin network with reduced hash power. This transition signals how quickly mining economics can reshape industry behavior when alternative revenue streams become more attractive.

Why AI Computing Is Reshaping Mining Economics

The reallocation of mining resources toward AI infrastructure stems from compelling economic fundamentals. According to Leon Lyu, founder and CEO of StandardHash, “AI and high-performance computing workloads now offer more predictable margins compared to Bitcoin mining.” This insight reveals the core challenge driving the industry pivot: miners are seeking stable, consistent returns rather than exposing themselves to the volatility and difficulty swings inherent in Bitcoin mining.

The attractiveness of AI mining lies in its operational characteristics. Large-scale mining facilities—typically engineered for massive energy consumption and sophisticated cooling systems—can be rapidly repurposed for AI computing workloads without substantial infrastructure overhaul. These facilities possess precisely the power delivery and thermal management capabilities that AI data centers demand. Meanwhile, Bitcoin mining has faced mounting pressure, with 2025 positioning itself as an especially difficult year for the sector, according to industry publication TheMinerMag. Rising debt burdens and compressed revenue are forcing miners to evaluate alternative paths to profitability.

Hashrate Decline: Temporary Adjustment or Structural Shift?

Despite the downward pressure on Bitcoin’s network hashrate, recent market developments reveal a more nuanced picture. Mining difficulty has undergone four downward adjustments since mid-November, a mechanism designed to maintain consistent block times even as network hash power decreases. This adjustment process actually improves mining profitability at the individual miner level. Additionally, hashprice—the metric measuring miner revenue per unit of computational power—has strengthened from $37 to $40 per petahash per second daily over the past month.

These developments create an apparent paradox: hashrate is falling, yet mining economics are improving. The explanation lies in market equilibrium mechanics. As weaker or less efficient miners exit Bitcoin mining to pursue AI opportunities, the remaining miners face reduced competition and higher individual rewards despite the smaller overall network. The downward difficulty adjustments amplify this effect, making each unit of hashing power more valuable. This suggests the current hashrate decline may represent a market rebalancing rather than a permanent exodus from Bitcoin mining.

Mining Hardware Makers Adapt to Shifting Demand

The AI mining trend has prompted immediate responses from hardware manufacturers. Bitmain, the world’s leading Bitcoin mining equipment provider, has begun aggressively adjusting its pricing strategy. A recent promotion offered multiple S19 XP+ Hydro mining units at reduced rates, signaling the company’s recognition that hardware demand is under pressure. These price cuts reflect the broader competitive dynamics facing traditional Bitcoin mining equipment as the industry navigates declining profitability and resource competition.

This hardware price adjustment serves a dual purpose: it helps Bitmain maintain market share among remaining Bitcoin miners while signaling industry awareness of shifting incentives. As mining facilities increasingly view their equipment as fungible assets that can be redeployed between Bitcoin and AI workloads, hardware makers must adapt their commercial strategies accordingly. The traditional focus on Bitcoin-specific innovations faces competition from a new market reality where hardware flexibility and repurposing capability have become competitive advantages.

The Broader Implications for Mining and Bitcoin Networks

The migration of computational resources toward AI mining represents a natural market response to diverging economic opportunities. Miners, fundamentally rational actors, allocate their substantial capital and electricity according to expected returns. The current environment clearly favors AI computing, at least in the near term. However, the subsequent improvement in Bitcoin mining economics—driven by difficulty adjustments and reduced competition—may eventually stabilize the situation.

What’s unfolding is not necessarily a terminal decline in Bitcoin mining interest, but rather a dynamic rebalancing within a maturing industry. As AI computing margins eventually normalize and competition increases, the economic calculus may again favor Bitcoin mining. The cryptocurrency mining sector demonstrates the sophisticated, market-driven adaptation that characterizes modern industrial production. The rise of AI mining as an alternative for traditional miners underscores how computational infrastructure has become a valuable, flexible resource contested across multiple applications and industries.