CoinShares: Up to 20% of Bitcoin Miners Operating at a Loss After Toughest Quarter Since Halving

Mining Costs Surge as Hashprice Hits Multi-Year Lows

The Bitcoin mining industry is enduring one of its most challenging periods since the last halving event. According to a new report from CoinShares, Q4 2025 proved to be the hardest quarter for BTC miners, with the weighted average cost of production among publicly traded mining companies reaching $79,995 per coin.

Simultaneously, hashprice — the primary metric for mining profitability — declined to $36–38 per PH/s per day. Three consecutive negative difficulty adjustments occurred for the first time since July 2022, which CoinShares analysts interpret as a clear signal of miner capitulation.

The situation deteriorated further in Q1 2026, with hashprice dropping to $29. At the time of the report, it had partially recovered to $33.6 but remains near five-year lows.

The strain on the industry has directly impacted the network: on March 20, Bitcoin's mining difficulty plummeted 7.7% — one of the sharpest drops this year.

Why This Matters

A capitulation event among a significant share of miners has direct implications for the Bitcoin network's security and stability. Mass equipment shutdowns reduce the total hashrate, and while current levels remain robust, the trend warrants close attention. For investors holding shares in publicly traded mining firms, the environment signals potential margin compression and rising debt burdens.

The structural shakeout could accelerate industry consolidation, concentrating mining power among fewer, more efficient operators. This dynamic reshapes the competitive landscape of Bitcoin's security infrastructure.

Who Is at Risk

CoinShares estimates that 15–20% of all Bitcoin miners are currently operating at a loss. The most vulnerable are operators running older-generation hardware who pay $0.05 per kWh or more for electricity. At current hashprice levels, these machines function below the breakeven threshold.

To maintain positive margins, these operators would need access to power rates below $0.05 per kWh. Meanwhile, state-of-the-art mining facilities equipped with the latest hardware continue to enjoy healthy profitability even at standard industrial electricity rates.

CoinShares Outlook: Only the Strongest Survive

James Butterfill, head of research at CoinShares, warned that prolonged price stagnation would worsen conditions across the sector. He noted that an extended downturn will force unprofitable operations offline, slowing hashrate growth and eventually rebalancing mining economics.

"If the price does not rise above $80,000 by year-end, hashprice will continue declining before likely plateauing. This will happen as weaker players exit the network."

— James Butterfill, Head of Research at CoinShares

The analysts emphasize that the current downturn is not a typical cyclical phenomenon but rather a structural narrowing of viable operators. Only companies with two core advantages — energy-efficient next-generation equipment and access to cheap power sources — are positioned to weather the storm.

At the time of the report, Bitcoin was trading around $69,300, down approximately 3% over the preceding 24 hours according to CoinGecko data. Earlier in March, Wintermute analysts also expressed the view that the traditional Bitcoin mining model is becoming increasingly untenable.