VanEck identified Bitcoin's (BTC) declining hashrate as a contrarian bullish signal in its Monday report, citing historical patterns where miner capitulation preceded price recoveries.
Bitcoin's network hashrate fell 4% through December 15, marking the steepest monthly decline since April 2024.
The asset manager said similar periods have historically led to positive returns for long-term holders.
Bitcoin traded around $87,900 Monday after falling to approximately $81,000 on November 21 from its $126,080 all-time high recorded a month earlier.
What Happened
VanEck's "Mid-December 2025 Bitcoin ChainCheck" found that 90-day forward returns were positive 65% of the time when network hashrate was shrinking, compared to 54% when hashrate was growing.
The report noted that "when hashrate compression persists over longer periods, positive forward returns tend to occur more often and with greater magnitude."
Mining profitability deteriorated sharply as breakeven electricity costs for Antminer S19 XP rigs fell from approximately $0.12 per kilowatt-hour in late 2024 to roughly $0.077 by mid-December 2025.
The decline reflects worsening economics for miners, forcing higher-cost operators to shut down equipment or exit the network.
VanEck estimated that shutdowns in China's Xinjiang region may have removed approximately 1.3 gigawatts of mining capacity, potentially redirected toward artificial intelligence infrastructure.
Meanwhile, institutional buying diverged sharply from retail behavior.
Digital asset treasuries added approximately 42,000 Bitcoin between mid-November and mid-December, marking their largest monthly accumulation since July 2025.
Strategy accounted for most purchases, leveraging its ability to issue common stock while its market-to-net-asset-value ratio remained above 1.0.
Bitcoin exchange-traded product holdings declined 120 basis points month-over-month to 1.308 million Bitcoin.
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Why It Matters
The hashrate decline signals miner capitulation, where financially stressed operators exit the network during periods of compressed profitability.
VanEck characterized this as historically bullish for patient investors willing to accumulate during periods of industry stress.
The report noted a "diamond hands divergence" where medium-term holders reduced exposure while long-term holders remained largely unchanged.
Declining hashrate typically indicates only the most efficient miners with access to cheapest electricity can operate profitably.
This dynamic often marks cyclical bottoms as weaker participants exit and network difficulty adjusts downward.
Bitcoin fell approximately 22% over the past three months, marking its worst fourth quarter since 2018.
VanEck analysts said improving liquidity conditions and reduced speculative leverage suggest the market is undergoing structural recalibration rather than lasting damage.
The firm framed 2026 as the potential horizon where current miner stress and institutional accumulation could translate into stronger price performance.
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