Bitcoin miners are operating at steep losses, with average production costs around $88,000 per coin versus a market price near $68,000, as rising energy prices and war-related disruptions squeeze margins.
Geopolitical tensions in the Middle East, including oil above $100 and the effective closure of the Strait of Hormuz, are driving up electricity costs and contributing to falling hashrate, slower block times, and sharp drops in network difficulty.
Difficulty dropped 7.76% on Saturday to 133.79 trillion, the second-largest negative adjustment of 2026 after February’s 11.16% plunge during Winter Storm Fern. Difficulty is now nearly 10% below where it started the year and far below November 2025’s all-time high of nearly 155 trillion.
Strained mining economics are forcing miners to sell more bitcoin and push into AI and high-performance computing for steadier revenue, adding pressure to a market already weighed down by underwater holders and heavy leverage.
The next difficulty adjustment is projected for early April and is expected to decline further according to CoinWarz data. If bitcoin stays below $88,000, and there’s no sign of a return to that level in the near term, the miner exodus continues, and difficulty keeps falling.
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