Bitcoin Hashrate Drops 4% in December, Hints at Recovery

Bitcoin's network hashrate declined by 4 percent over the month ending December 15, marking the sharpest monthly drop since April 2024 and prompting analysts to view it as a potential signal for future price recovery.

The hashrate, a measure of the computing power securing the Bitcoin network, fell amid challenging conditions for miners. According to a report from VanEck analysts Matt Sigel and Patrick Bush, this decline reflects miner capitulation, where less profitable operations shut down due to reduced revenues following Bitcoin's recent price slump and the effects of the April 2024 halving event, which cut mining rewards in half. The analysts linked the drop to the offline status of approximately 1.3 gigawatts of mining capacity in China, with some of that power potentially redirecting toward high-demand AI computing applications. VanEck estimates this trend could result in up to 10 percent of Bitcoin's overall hashrate shifting away from cryptocurrency mining.

Historical data analyzed by VanEck suggests such declines often precede price gains. Since 2014, Bitcoin's 90-day forward returns have been positive 65 percent of the time following a 30-day hashrate drop, compared...