Headline: Bitcoin mining difficulty plunges ~11% — biggest drop since China crackdown as miners capitulate Bitcoin’s network just saw its mining difficulty fall by roughly 11% — the steepest decline since China’s 2021 mining purge — after a sharp hashrate contraction triggered by tumbling prices and winter-storm outages in the U.S. What changed - The difficulty adjustment dropped from about 141.6 trillion to roughly 125.86 trillion, according to Blockchain.com. Difficulty is the protocol’s way of keeping block times near 10 minutes by automatically recalibrating about every two weeks. - That fall signals a significant reduction in the number of machines actively securing the network: many rigs went offline as profitability deteriorated. Why it happened - Price pressure: Bitcoin has slid from an all-time high near $126,000 in October to roughly $69k today, squeezing miner margins. The current spot price is around $68,851. - Falling hashprice: Revenue per terahash (the “hashprice”) has tumbled from nearly $70 at the ATH to just over $35 now, making older, less efficient miners uneconomic. - Operational stress: Severe winter storms — notably in Texas — forced grid operators to request curtailments, and some public miners reported daily bitcoin output drops exceeding 60%. - Strategic pivots: Faced with low returns and high energy costs, some operators powered down older gear or repurposed capacity for AI workloads where long-term contracts from mega-cap firms can be more attractive. Bitfarms (BITF) notably saw its stock spike after announcing a shift toward data-center development for high-performance computing and AI. What it means - Short term: A lower difficulty reduces competition for the miners who remain online, improving their short-term odds of finding blocks and easing some pressure on margins. - Market signal: Large difficulty drops often coincide with miner capitulation — periods when the weakest operators exit the market. Historically, such capitulation has sometimes come before price stabilization or rebounds, as miners sell mined BTC to cover costs and the market digests reduced selling pressure. Bottom line This adjustment reflects a stressed but self-correcting mining ecosystem: declining revenue and weather-driven outages pushed many machines offline, dropping difficulty to help balance the network. Whether this capitulation marks a local bottom or more consolidation for mining firms remains a watchpoint for traders and industry observers. Read more AI-generated news on: undefined/news

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