Bitcoin Hashrate Dives Amid AI-Driven Shift in Mining Landscape

Rapha Zagury, CEO of Twenty One Capital, has warned that Bitcoin's hashrate is entering its first bear market. Speaking at the Bitcoin Asia 2026 conference in Hong Kong, he noted that the network's hashrate had approached 1.3 zettahashes per second late last year before beginning a gradual decline.

The current downturn marks the longest period Bitcoin has spent below a hashrate record without recovering, according to Zagury. This matters because rising network hashrate increases competition between miners, while a decline allows surviving operators to capture a larger share of bitcoin production.

One reason for the decline is that mining infrastructure is being redirected towards artificial intelligence and high-performance computing. Companies such as Keel Infrastructure have shut down their U.S. bitcoin mining operations to prepare sites for AI and HPC workloads, while Bitdeer has signed a 16-year AI infrastructure agreement worth around $4.7 billion.

Zagury argued that this trend is fundamentally different from the 2021 China crypto mining crackdown, when mining machines largely moved to other jurisdictions and eventually came back online. He noted that large public miners are increasingly reconsidering pure-play Bitcoin mining, with shrinking competition potentially benefiting those who remain committed.