Miner profits hit a historic low: the industry dilemma behind the continuous decline in Bitcoin hash rate

According to the latest report from JPMorgan, the Bitcoin mining industry is facing dual pressures: network hash rate has declined for the second consecutive month, and miner profitability has fallen to its lowest level on record. This not only reflects short-term market adjustments but also signals a profound differentiation and reshaping within the entire mining sector.

Dual Decline in Hash Rate and Revenue

As of December 2025, the Bitcoin network’s average monthly hash rate decreased by 30 EH/s month-over-month, a 3% drop, bringing the average to 1,045 EH/s. This is the second consecutive month of decline. Meanwhile, miners’ profitability has faced even more severe impacts.

JPMorgan analysts note that last month, the average daily block reward income for miners was $38,700 per EH/s, hitting the lowest level on record. This means that even miners with the same hash rate are experiencing continuous income erosion.

Why Is This Happening

Difficulty Adjustment and Hash Rate Clearing

The direct cause of the hash rate decline is the automatic adjustment mechanism of Bitcoin’s difficulty. When more miners shut down due to declining profitability, the network hash rate decreases accordingly, and the difficulty adjusts downward. This is a natural market clearing process.

Cost Pressure Intensifies

The 32% YoY decline in miner profits reflects a comprehensive increase in cost pressures. Fixed costs such as electricity, miner depreciation, and maintenance costs are rapidly rising in the context of declining revenues. Small and medium-sized miners face especially significant pressure, with many marginal miners already shutting down.

Changes in Market Environment

Relevant information shows that Bitcoin’s current price is $93,381.50, which has recently risen but has not effectively improved miners’ profit margins. The reason is that miner revenue mainly comes from block rewards, not Bitcoin price. When network hash rate increases and difficulty rises, the reward per unit of hash rate decreases.

Differentiation Among Listed Miners

By the end of 2025, the total market value of 14 JPMorgan-tracked publicly listed Bitcoin miners and data center operators in the US reached $48 billion, a 73% increase for the year. However, behind this overall figure, there is significant uneven performance differentiation.

Huge Variance in Stock Performance

In December, Hut 8 performed the best, with a 2% increase in stock price, while CleanSpark performed poorly, with a 33% decline. This huge disparity reflects fundamental differences in the competitiveness of various miners.

Polarization in Yearly Performance

Although only two companies outperformed Bitcoin in December, over the entire year, 9 out of 14 companies outperformed Bitcoin. Notably, IREN and Cipher Mining led the way. This indicates that leading miners with cost advantages, technological advantages, or financing advantages are gaining larger market shares through this industry adjustment.

Future Industry Trends

Increasing Concentration

When miner profits are at historic lows, only those with the lowest costs and most advanced technology can continue to be profitable. This will accelerate industry consolidation, with small miners gradually exiting and leading miners expanding their market share.

Hash Rate May Continue to Adjust

In the short term, if more marginal miners choose to shut down, hash rate could continue to decline. However, in the long term, once difficulty adjusts appropriately and profitability improves, new miners may re-enter the market. This depends on Bitcoin’s subsequent price performance and changes in global electricity costs.

Summary

The Bitcoin mining industry is undergoing a profound adjustment. Continuous hash rate declines and record-low miner profits are not signs of industry decline but part of market clearing and survival of the fittest. For investors, the focus should be on leading miners with cost competitiveness, as they are more likely to gain larger market shares during this adjustment. Meanwhile, future Bitcoin price trends and global electricity costs will directly influence the overall health of the mining industry.