Bitcoin's network hashrate drops 17% below its peak as Russia bans cryptocurrency mining in Moscow and parts of Kursk through 2032 to protect its power grid. Simultaneously, unprofitable public miners pivot to artificial intelligence, signing over $70 billion in hosting contracts. The shift marks a major transition for the industry as companies like Hut 8 leverage cheap power access for high-performance computing.
Bitcoin hashrate decline
- ▪Bitcoin mining difficulty fell as much as 19.9% below its record high as of early August 2026.
- ▪Bitcoin's network hashrate fell as much as 17% below its all-time high, according to estimates by CryptoQuant analyst Maartunn.
- ▪Bitcoin's network hashrate eased from a late-2025 peak above one zettahash per second to a range of 850 to 920 exahashes per second through the summer of 2026.
Mining profitability pressures
- ▪Publicly listed Bitcoin miners sold a record 32,000 BTC in the first quarter of 2026 to raise cash, exceeding the total amount of coins they sold across all four quarters of 2025.
- ▪Publicly listed Bitcoin mining companies lost an estimated $19,000 on every bitcoin produced as of late March 2026, with a weighted average cash cost near $80,000 per coin.
- ▪A basket of Bitcoin mining stocks gained approximately 56% in early 2026, even as bitcoin's price fell about 17% and CoinShares projected hashrate could recover to 1.8 zettahashes if prices reach $100,000.
Miner pivot to AI infrastructure
- ▪Bitcoin mining facilities are attractive for artificial intelligence data center conversions because they possess cheap electricity access and existing grid connections.
- ▪Hut 8's contracted artificial intelligence infrastructure portfolio reached $26.6 billion by August 2026.
- ▪Publicly listed Bitcoin mining companies, including Hut 8, Core Scientific, TeraWulf, and IREN, have signed over $70 billion in cumulative artificial intelligence and high-performance computing hosting agreements.
- ▪Research firm CoinShares projects that artificial intelligence and high-performance computing work could supply 70% of listed Bitcoin miners' revenue by the end of 2026, up from roughly 30%.
Russia mining ban in Moscow
- ▪Russian government decree No. 936, signed on July 25, 2026, banned cryptocurrency mining and mining pool participation in Moscow, the Moscow Region, and parts of Kursk through December 31, 2032.
- ▪Russian companies have used domestically mined bitcoin for international trade payments to counter Western sanctions, following legislation passed by the Russian parliament in July 2026.
- ▪Russia accounted for an estimated 175 exahashes per second, or 16.4% of Bitcoin's global computing power, in the first quarter of 2026, ranking second behind the United States.
- ▪The United States Treasury sanctioned Russian cryptocurrency mining company BitRiver and 10 of its subsidiaries in 2022 to prevent the monetization of Russian energy resources to offset sanctions.
Russian energy grid constraints
- ▪Cryptocurrency mining consumes approximately 1 gigawatt in the Moscow power system, while the region's data-center capacity is projected to reach 3.6 gigawatts, or 17% of peak demand, by 2032.
- ▪The Russian Energy Ministry enacted year-round cryptocurrency mining restrictions to mitigate power-capacity shortages as energy-intensive mining facilities strain regional grids.
- ▪Prior to the Moscow ban, Russia legalized registered mining in 2024 but subsequently banned the activity in 10 other regions, later extending year-round restrictions to southern Irkutsk, Buryatia, and Zabaykalsky Krai.
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