Bitcoin's mining difficulty has dropped significantly, now sitting at 126.23 trillion, which is approximately 14% lower than its peak earlier this year. This marks only the second time in history that the mining difficulty has fallen below year-ago levels.
Decline in Difficulty Reflects Weak Mining Economics and Limited Capacity Growth
As of now, the mining difficulty is down about 19.1% from the all-time high of 155.97 trillion recorded in November 2025. The adjustment, which occurs every 2,016 blocks to maintain an average block time of about 10 minutes, indicates a reduction in competition among miners.
The current decline in difficulty has been attributed to various factors, including poor mining economics and a shift of resources towards artificial intelligence. Additionally, significant operational disruptions in key mining regions, such as Texas, have further impacted mining capacity.
In January, the mining difficulty peaked, but it has since fallen by around 14%. This decline follows previous drops of 10% in June and 5% earlier in July, according to network data.
Historically, the only other instance of a year-over-year decline occurred after China's 2021 mining ban, which temporarily halved the network's computing power. However, this latest drop is primarily driven by unfavorable market conditions.
According to Luxor’s Hashrate Index, the falling bitcoin prices and reduced mining revenues have compelled miners to divert their investments into AI and high-performance computing. Furthermore, the average hashprice, which reflects expected miner earnings, fell to $27.66 per petahash per day in late June, almost matching its February low. It has since recovered slightly to $31.7.
Looking ahead, Luxor’s forward market projects an average hashprice of $31.85 per petahash per day through December, indicating minimal expectations for revenue recovery for miners for the remainder of 2026.