Bitcoin Enters Uncharted Territory with First-Ever Hashrate Bear Market
Bitcoin has entered its first-ever hashrate bear market, according to Twenty One Capital CEO Rapha Zagury. This means that the network's computing power has fallen below its previous record and stayed there for an extended period, which is unusual for Bitcoin.
The current decline in hashrate started after it reached a peak of nearly 1.3 zettahashes per second late last year. It has since dropped by an estimated 22% to 24% from that peak, marking the longest stretch between an all-time high and a full recovery on record.
Zagury argues that this decline is different from previous ones because it's not just about moving machines elsewhere but rather questioning whether new resources should be dedicated to Bitcoin mining. As a result, nearly all publicly listed mining companies are redirecting their investment towards artificial intelligence (AI) and high-performance computing (HPC),
Companies like TeraWulf have already started pivoting towards AI infrastructure demand, with $21 million in AI and HPC hosting revenue in the first quarter overtaking its Bitcoin mining revenue for the first time. Zagury suggests that companies controlling the best power sites may benefit from both trends at once.