Miner Stress and China Shutdowns

According to VanEck’s December 2025 ChainCheck report, over 400,000 mining machines in China’s Xinjiang province went offline. This removed an estimated 1.3 GW of capacity and reduced China’s computing power by around 100 exahashes within 24 hours. Analysts noted that this could account for about 10% of Bitcoin’s network hash rate.

Mining Economics Under Pressure

Bitcoin’s price dropped around 9% while volatility spiked, squeezing miners’ profitability. VanEck data shows that the electricity breakeven for a 2022 Bitmain S19 XP miner fell from $0.12 in December 2024 to $0.077 in mid-December 2025. Despite poor economics, many miners continue operations.

“While profitability for miners has been poor recently, many entities continue to mine despite periods of poor economics because they believe in Bitcoin’s future. To support the long-term hash rate of the Bitcoin network, we believe up to 13 nations are mining with support from their central governments.” – VanEck Analysts

Declining Hash Rate Historically Signals Gains

VanEck analysts emphasized that drops in hash rate have historically correlated with positive Bitcoin price performance. Since 2014, when hash rate declined, 90-day forward BTC returns were positive about 65% of the time. The 180-day forward returns averaged 20.5% during hash rate declines compared to 20.2% during increases. Technical and on-chain data suggest a potential recovery despite current pressure.

Price Update

According to Binance, Bitcoin was trading at $87,400 at the time of writing, down 1.77% in the past 24 hours.

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In recent weeks, Riot Platforms has amassed a 12% stake in Bitfarms, aiming to create one of the world’s largest bitcoin miners. According to Reuters, under Bitfarms’ plan, if an entity accumulates more than a 15% stake in Bitfarms after June 20 and until September 10, the company will issue new shares and dilute that entity’s stake. After September 10, this threshold will be relaxed to 20% if certain conditions are met.

Bitfarms stated that this plan, approved by the board, was “to protect the integrity of our previously announced strategic alternatives review process and is in the best interest of shareholders.” A “poison pill,” also known as a shareholder rights plan, is a company’s defense mechanism against an undesirable takeover and attempts to make the company less attractive or monitor the ownership of the takeover target.

Bitfarms rejected a nearly $1 billion takeover offer from Riot Platforms in April. Riot wanted to buy Bitfarms’ existing shares at $2.30 per share, representing a one-month weighted average premium of 24% per share. Bitfarms stated that this offer underestimates the value of the company.

On May 28, Riot purchased a 9.25% stake in Bitfarms, becoming the company’s largest shareholder. Riot purchased an additional 1.5 million shares on June 5, increasing its stake to approximately 12%. Riot plans to call a special meeting of shareholders to add new, independent directors to Bitfarms’ board of directors.

On May 13, Bitfarms fired former CEO Geoffrey Morphy after he filed a $27 million lawsuit for breach of contract, wrongful termination, and aggravated and punitive damages.

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Despite their decreasing numbers, individual miners still manage to find blocks on their own from time to time. Last night, a miner who found the 841,286th block managed to win the 3.125 BTC mining reward along with transaction fees.

This individual miner, who managed to earn a total of 3.43 BTC, had an income of over $218,000 in dollars. According to information from Bitcoin data site Mempool, this person, who uses individual mining software from the CKpool pool, had a very low chance. The hash rate of the individual miner was 120 PH per second. Considering that the total hash rate power of the Bitcoin network is 638 exahash per second, the miner’s chance of finding the block alone was even lower than 1 in 5000.

Of course, this person is not the first to hit this 0.02% lottery. In the past, many times individual miners have been seen to find blocks on their own. Even before the halving, a miner found a block on its own on April 5th and earned $422,000.

As is known, the halving, where Bitcoin mining rewards were halved, took place on the 840,000th block on April 20. The ViaBTC mining pool was the first to find the block and sold the first satoshi of the first Bitcoin it earned from there for $2.1 million last week.

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The merger has transformed Hut 8 into a more diversified entity with various revenue streams, including self-mining, managed services, hosting, and high-performance computing (HPC) and artificial intelligence (AI). Analyst Mark Palmer believes that Hut 8’s stock trades at a discount compared to its peers, a gap that is expected to narrow as the company expands its self-mining operations.

Hut 8 currently holds a significant stash of 9,102 bitcoins, ranking it second among listed miners in terms of bitcoin holdings. This sizable bitcoin reserve not only provides a liquidity cushion but also offers the potential for upside during bitcoin price rallies. The value of its crypto holdings amounts to approximately $592 million, equivalent to around 82% of its market capitalization.

Since the merger, Hut 8’s management has been focused on reducing the company’s cost of mining bitcoin and its realized cost of energy, while also increasing cash flow. These strategic efforts are anticipated to contribute to the company’s growth and profitability moving forward. Hut 8’s stock was trading 5.2% higher at $8.47 at the time of publication, reflecting positive investor sentiment following Benchmark’s bullish rating.

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