Bitcoin hash rate drops below 1 ZH/s as miners face increasing pressure on profitability

Bitcoin miners are facing profitability headwinds as the network hash rate decreases and the difficulty level will adjust downward.

Bitcoin (BTC) mining is once again under pressure as the hash rate has fallen below a crucial threshold not seen since late 2025. One expert believes that demand for AI and manufacturer-led expansion is reshaping network participation.

StandardHash CEO and founder Leon Lyu warned of a major change in the Bitcoin mining landscape after the network’s seven-day average hash rate fell below 1 ZH/s for the first time since September last year.

Miners retreat

In a post on X, Lyu declared that the decline indicates increasing pressure on miners’ profitability, while a negative difficulty adjustment of around 4.34% is expected in about three days. He attributed the decline to several structural factors, including major mining companies shifting their energy capacity from Bitcoin mining to artificial intelligence computing services in pursuit of higher margins.

Lyu also highlighted the growing influence of mining hardware manufacturers, as he noted that Bitdeer is aggressively deploying its own proprietary platforms and is gearing up to become the largest North American miner by hash rate.

Additionally, he said Bitmain appears to be expanding its own mining footprint through secondary channels and partnerships, even as the network’s overall hash rate is lower.

Lyu’s comments come at a time when competition for energy has increased between BTC miners and artificial intelligence data centers. In recent years, several publicly traded mining companies have announced plans to repurpose or co-locate mining infrastructure for high-performance computing and AI workloads.

At the same time, grid operators and regulators in the US and Europe have also done so marked the rising demand for energy from AI data centers, which often secure long-term electricity contracts. Industry reports indicate that AI facilities typically generate significantly higher revenues per megawatt than Bitcoin mining, which has increased pressure on miners during periods of low hash prices. This trend has accelerated energy redistribution decisions in energy-constrained regions.

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The toughest year for BTC Mining

These developments follow a difficult year for Bitcoin miners. TheMinerMag was published in December observed that the BTC mining industry went through one of its toughest periods last year. According to the publication, miners faced the “toughest” profit margins in the industry’s 15-year history. By 2025, even large, publicly traded companies were struggling to cover costs. Mining revenues fell sharply as the hash price, which measures revenue from computing power, fell from about $55 per unit to about $35.

The report describes this level as a long-term trough rather than a short-term decline. The situation worsened after BTC’s price fell from an all-time high of nearly $126,000 in October, further squeezing the already strained mining operations.