Bitcoin's network hash rate declined 4% over the past 30 days, marking the steepest drop since April 2024. VanEck, an investment management firm, suggests this miner capitulation may indicate a market bottom despite mounting operational pressures.
What Happened: Mining Power Contracts
VanEck's mid-December 2025 Bitcoin ChainCheck report documented the hash rate decline during a month when Bitcoin prices fell roughly 9%. The network's 30-day realized volatility exceeded 45%, the highest level since April 2025.
Matthew Sigel and Patrick Bush noted the hash rate typically contracts during significant price pullbacks.
China's Xinjiang province forced approximately 400,000 mining machines offline last week, eliminating an estimated 1.3 gigawatts of capacity.
The shutdown removed around 100 exahashes per second from China's computing power within 24 hours. VanEck analysts attributed this to power generation shifting toward artificial intelligence demand, potentially eliminating up to 10% of Bitcoin's network hashing power.
Miner economics deteriorated as breakeven electricity prices for a 2022-era Bitmain S19 XP miner dropped from $0.12 in December 2024 to $0.077 by mid-December 2025, a 36% decline. "While profitability for miners has been poor recently, many entities continue to mine despite periods of poor economics because they believe in Bitcoin's future," Sigel and Bush wrote.
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Why It Matters: Historical Patterns
VanEck identified declining hash rates as a potential bullish contrarian signal based on data since 2014. Bitcoin's 90-day forward returns proved positive approximately 65% of the time when hash rates declined over the prior 30 days, compared with 54% during rising hash rate periods.
Average 180-day forward returns reached about 20.5% when hash rates fell versus 20.2% when increasing.
Across 346 days since 2014 with negative 90-day hash rate growth, 180-day forward Bitcoin returns were positive 77% of the time with an average return of 72%.
Market analyst Ted Pillows identified a 3-day bullish divergence pattern that previously marked market bottoms in its last two appearances. Bitcoin traded at $87,159 at press time, down 2% over the past 24 hours.
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