Bitcoin Mining Difficulty Slides as Storm Fallout and AI Shift Weigh on Network

Bitcoin mining difficulty fell 7.76% to 133.79 trillion on March 21 at block 941,472, as miners scale back operations.

The adjustment followed slower block production, with average times reaching 12 minutes 36 seconds, well above the 10-minute target. Moreover, network hashrate has declined to about 920 EH/s, down from the 1 zetahash level recorded in 2025, while the latest mining epoch averaged 760.10 EH/s.

Overall, mining economics have deteriorated and the average production costs are estimated at US$88,000 (AU$125K) per Bitcoin, compared with a market price near US$69,200 (AU$98K), leaving a gap of roughly US$19,000 (AU$27K) per coin. 

Hashprice stands at US$33.30 (AU$47.73) per petahash per day after falling to a record low of US$28 (AU$40.13) in February. Transaction fees account for just 0.68% of miner revenue, providing little offset to shrinking block rewards.

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Pressure on Miners, and The AI Pivot Accelerates

In February, the pressure on miners intensified during Winter Storm Fern, which temporarily removed about 200 EH/s from the network. 

The disruption triggered an 11.16% difficulty drop, the largest since 2021, and forced Riot Platforms to shut down about 70% of its hashrate, curtailing around 770 megawatts across multiple US regions. 

A 14.7% rebound in difficulty followed on Feb. 20, but the latest adjustment reversed much of that recovery.

And miners are increasingly redirecting capital toward artificial intelligence infrastructure. 

At least eight publicly traded mining firms have announced partial or full moves into AI and high-performance computing, where revenue is estimated at US$10 million (AU$14.3 million) to US$20 million (AU$28.6 million) per megawatt, compared with roughly US$1 million (AU$1.43 million) for Bitcoin mining.

Several companies have also reduced direct Bitcoin exposure, like Bitfarms and Hut 8, which have signalled strategic shifts away from mining. 

Meanwhile, Bitdeer has exited its BTC holdings and Core Scientific sold US$175 million (AU$250 million) in Bitcoin as it expanded AI hosting capacity. 

Public miners have collectively cut treasury holdings by 15,096 BTC.

With oil above US$100 (AU$143) per barrel and part of global hashrate exposed to energy market volatility, further difficulty declines remain possible if Bitcoin stays below production cost. The next adjustment is expected in early to mid-April.

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