Bitcoin Miners Turn To AI As Hashrate Stays Below Its Peak

After reaching a peak at the end of 2025, the computing power that secures the Bitcoin network is experiencing an unusual decline. Rapha Zagury, CEO of Twenty One Capital, calls this situation the first “bear market of the hashrate”. This decline mainly reflects the deterioration of mining profitability. However, the phenomenon is amplified by artificial intelligence, as many operators are now dedicating their energy infrastructures to long-term computing contracts.

Bitcoin Experiences Its Longest Period Below a Hashrate Record

On August 28, Rapha Zagury presented his analysis during the Bitcoin Asia conference in Hong Kong, while bitcoin just closed its best August month in nine years. He stated:

We are going through, I believe, the first bear market of the hashrate in Bitcoin’s history.

The hashrate measures the computing power mobilized by mining specialists to validate blocks. Zagury confirms in a filing published with the SEC that this indicator was close to 1.3 zettahash per second at the end of 2025 before gradually declining. This is the longest period during which the network remains below its previous peak without reclaiming it.

Three factors can help understand this trend :

• The average hashrate dropped by 5.8% between the first and second quarters of 2026, from 1066 to 1004 EH/s ;
• The daily income per unit of computation, or hashprice, fell to $27.89 per PH/s ;
• Nearly 252 EH/s of less profitable machines are estimated to have been shut down, mainly among older equipment.

These statistics come from Hashrate Index, which identifies profitability as the main cause of the decline. Bitcoin’s drop after its October 2025 peak reduced mining companies’ revenues, while electricity and operating costs continued to pressure their margins.

Thus, the term “bear market” remains an interpretation. Bitcoin has no official threshold to label its hashrate as such. Therefore, daily estimates also fluctuate based on the block production speed. Seven or 30-day averages thus provide a more reliable reading than data from a single day.

AI-Related Contracts Divert Part of the Infrastructure

This situation differs from the shock triggered by the mining ban in China in 2021. At that time, machines mainly changed countries before coming back online. This time, some electrical capacities would permanently leave the mining sector to power data centers dedicated to artificial intelligence.

Zagury specified: “what we observe today is very different”. For him, almost no reputable large professional now maintains a strategy solely focused on large-scale mining.

Numerous operations support this observation. Keel Infrastructure has suspended all its US mining activities to convert its sites to AI and high-performance computing. The company had $819 million in cash as of August 7 to finance its transformation.

Bitdeer signed a $4.7 billion, 16-year contract to provide 121 MW of computing capacity in Norway. As for Hut 8, the company signed a 15-year lease for 352 MW in Texas. Its contracted portfolio now approaches 949 MW for AI.

These partnerships provide predictable income for mining, which depends on the main crypto’s price, network difficulty, and energy costs. They reveal a real reallocation of infrastructure but do not prove that AI alone justifies the entire hashrate decline.

The Decline Can Improve Margins for Remaining Miners

Thus, a lower hashrate does not reduce the number of bitcoins issued. The protocol adjusts the difficulty approximately every two weeks to maintain a block every ten minutes. From this perspective, mining specialists still active can obtain a larger share of the rewards if their competitors suspend their machines.

However, such potential improvement will depend on the bitcoin price and electricity cost. A rise in hashprice would bring equipment back online and attract new investments. Meanwhile, the multiplication of AI-related contracts would prolong the slowdown if operators sustainably prioritize these revenues.

The next trend will therefore need to be confirmed by the average hashrate, difficulty adjustments, and the real investments of major mining operators. For now, bitcoin is experiencing a continuous contraction, but not an immediate security crisis.