Bitcoin mining difficulty falls 19.9% as AI deals reshape miner economics

Bitcoin mining difficulty fell 19.9 percent from its peak to 126.23 trillion, the third-deepest ASIC-era drawdown, as hashrate contracted and miners pivoted to AI data-center contracts.

"Miners have found something more profitable to do with their hardware," Bitcoin Magazine Pro wrote, attributing the decline to compressed mining revenue, lower Bitcoin prices and power capacity moving into AI workloads.

The network's seven-day average hashrate stood near 868 exahashes per second on July 29, down from more than one zettahash per second at its late-2025 peak. Hashrate Index placed the 30-day measure near 940 EH/s, about 12 percent below the December record of 1,066 EH/s. Difficulty turned negative on a year-over-year basis for only the second time in Bitcoin's history, the first since China's 2021 mining ban.

Bitcoin traded near $63,100 on July 31, down about 47 percent over 12 months and almost 50 percent below its October 2025 record. Hashprice, which measures expected daily revenue from one petahash of computing power, stood near $32 per PH/s per day late in July. Older fleets can struggle to remain cash-positive around $30 to $35 unless operators secure electricity below roughly five cents per kilowatt-hour.

AI contracts decouple miner stocks from Bitcoin

Listed miners sold more than 32,000 BTC during the first quarter of 2026, exceeding their combined sales for all of 2025, as companies raised cash for debt, operating costs and data-center construction. A basket of mining equities gained 56 percent during the early part of 2026 while Bitcoin fell 17 percent, according to research cited in related crypto.news coverage.

Hut 8 signed a second 15-year lease for 352 megawatts at its Beacon Point campus in Texas on July 20, raising its total contracted AI portfolio to $26.6 billion. The company's shares more than quadrupled over the preceding 12 months. Core Scientific announced an AMD partnership on July 28 anchored by 15-year agreements covering about 530 MW and more than $14 billion in potential base contracted revenue. TeraWulf's AI and HPC lease revenue reached $21 million in the first quarter, overtaking its Bitcoin-mining revenue for the first time.

The pivot is not universal. Poolin Technology, once among the sector's top mining pools, filed for Chapter 11 bankruptcy protection last week, citing liabilities between $100 million and $500 million. Core Scientific paid Jack Dorsey's Block Inc. $42 million to terminate an ASIC supply agreement, and Ionic Digital plans to sell or scrap 73,400 of its 120,600 mining rigs before year-end.

Luxor described the trend as "a structural shift, not just a cyclical low," noting that listed miners had announced more than $70 billion in AI and HPC contracts while network hashrate posted its second consecutive quarterly decline.

Fees remain too small to replace the block subsidy

Miners collected about 20 BTC in fees during the seven days through July 13, equal to roughly 2.86 BTC per day — only 0.69 percent of total block rewards for that week. The network creates about 450 BTC in daily subsidy when blocks arrive on schedule. The next halving, currently projected for 2028, will cut the subsidy to 1.5625 BTC.

The security-budget gap matters over decades rather than weeks. Every future halving will reduce issuance, requiring some combination of higher Bitcoin prices, greater fee demand, improved mining efficiency or a smaller amount of economically sustainable hashrate. Current fee weakness does not prove the network faces a security failure — Bitcoin remains secured by hundreds of exahashes per second of computing power, and the protocol adjusts difficulty every 2,016 blocks to maintain ten-minute block production.

The next difficulty adjustment, expected around August 9 to August 11, will show whether miners continued leaving after the July 25 reset. A further reduction would confirm the contraction is ongoing; stable or rising difficulty would suggest the exodus has begun to slow. Investors will also watch Hut 8's second-quarter results on August 4 and whether miners continue selling Bitcoin reserves.

This article is for informational purposes only and does not constitute investment advice.