đ° Why are miners surrendering? Behind the drop in Bitcoin hashrate, AI is grabbing power
Bitcoin is down 1.5% this month, but is performing better than expectedâafter all, it rose 25% in August, and in September it usually gives back a lot. It can still climb 32% this quarter, but the hashrate has a problem. Minersâ hashrate has recorded its first quarter-over-quarter decline, with about 14,000 fewer BTC mined than in August. This isnât just a technical issue. Silicon Valley and AI companies are also competing for power, forcing Bitcoin mining farms to potentially cut productionâmeaning less output in the future.
Why is this news important?
Minersâ hashrate is a core indicator on the Bitcoin supply side. Its first quarterly decline suggests that the marginal cost of mining is rising. This isnât a simple seasonal pattern, but a sign that technological competition is intensifying. AI compute is cheaper and more powerful, directly squeezing the traditional GPU mining rig market, causing the marginal supply of Bitcoin hashrate to shrink. Behind this is geopolitics driving up electricity costs, along with a surge in AI compute demand. If hashrate continues to fall, Bitcoinâs supply curve will shift leftâgenerally beneficial for prices long termâbut in the short term it will intensify shakeouts in the mining industry.
Market impact
The impact on BTC prices depends on the short and medium term. In the short run, a decline in hashrate will reinforce bearish expectations, but the market has already priced in this risk, limiting Septemberâs drop. In the medium term, sustained low hashrate can support prices because supply decreases. The impact on ETH is relatively lagging; after the Ethereum upgrade, reliance on GPUs is reduced, so AI competition has limited effect on it. Capital flows will likely keep shifting from traditional finance toward AI and high-return tech stocks. The regulatory environment may be more inclined to support innovation rather than crypto fundamentalism. Historically, during the 2015 power crisis, miner production cuts also put short-term pressure on prices, but eventually lower mining rig costs helped drive a bull market.
Trading idea
- Coin: BTC
- Direction: Bullishđ Predicting a rise
- Duration: 12 hours
đĄ Personal view: A drop in hashrate is bullish for BTC in the medium term, but in the short term it can trigger selling. The key level to watch is the $105.69K-$105.69K range; if it breaks below $105.69K, this logic would no longer hold.
This article has no project sponsors, and the author does not hold any of the mentioned assets
$BTC $ETH #BTC #ETH
đ Historical backtest
- After a similar postââBitcoin tops one million: Analysts parse the current cycleâ (2024-11-30)âwas published, BTCâs 12h performance was -0.58%, and the bullish outlook was â correct
â ď¸ Not investment advice; predictions are for reference only
#BitcoinSurpasses$77000
Bitcoin is down 1.5% this month, but is performing better than expectedâafter all, it rose 25% in August, and in September it usually gives back a lot. It can still climb 32% this quarter, but the hashrate has a problem. Minersâ hashrate has recorded its first quarter-over-quarter decline, with about 14,000 fewer BTC mined than in August. This isnât just a technical issue. Silicon Valley and AI companies are also competing for power, forcing Bitcoin mining farms to potentially cut productionâmeaning less output in the future.
Why is this news important?
Minersâ hashrate is a core indicator on the Bitcoin supply side. Its first quarterly decline suggests that the marginal cost of mining is rising. This isnât a simple seasonal pattern, but a sign that technological competition is intensifying. AI compute is cheaper and more powerful, directly squeezing the traditional GPU mining rig market, causing the marginal supply of Bitcoin hashrate to shrink. Behind this is geopolitics driving up electricity costs, along with a surge in AI compute demand. If hashrate continues to fall, Bitcoinâs supply curve will shift leftâgenerally beneficial for prices long termâbut in the short term it will intensify shakeouts in the mining industry.
Market impact
The impact on BTC prices depends on the short and medium term. In the short run, a decline in hashrate will reinforce bearish expectations, but the market has already priced in this risk, limiting Septemberâs drop. In the medium term, sustained low hashrate can support prices because supply decreases. The impact on ETH is relatively lagging; after the Ethereum upgrade, reliance on GPUs is reduced, so AI competition has limited effect on it. Capital flows will likely keep shifting from traditional finance toward AI and high-return tech stocks. The regulatory environment may be more inclined to support innovation rather than crypto fundamentalism. Historically, during the 2015 power crisis, miner production cuts also put short-term pressure on prices, but eventually lower mining rig costs helped drive a bull market.
Trading idea
- Coin: BTC
- Direction: Bullishđ Predicting a rise
- Duration: 12 hours
đĄ Personal view: A drop in hashrate is bullish for BTC in the medium term, but in the short term it can trigger selling. The key level to watch is the $105.69K-$105.69K range; if it breaks below $105.69K, this logic would no longer hold.
This article has no project sponsors, and the author does not hold any of the mentioned assets
$BTC $ETH #BTC #ETH
đ Historical backtest
- After a similar postââBitcoin tops one million: Analysts parse the current cycleâ (2024-11-30)âwas published, BTCâs 12h performance was -0.58%, and the bullish outlook was â correct
â ď¸ Not investment advice; predictions are for reference only
#BitcoinSurpasses$77000
