AI Shift Drives Bitcoin Mining Hasrate Decline

Bitcoin's network hashrate is experiencing its first sustained bear market, according to Twenty One Capital CEO Rapha Zagury. The hashrate peaked at around 1.3 zettahashes per second late last year but has since declined, marking the longest period below a record without recovery.

The decline in hashrate is driven by artificial intelligence (AI) and high-performance computing companies increasingly using mining infrastructure for their own power and data needs.

Major miners like Keel Infrastructure and Bitdeer are pivoting to AI contracts, which offer more stable returns. For miners who continue focusing on bitcoin, reduced competition could improve profitability by capturing a larger share of bitcoin production.