Bitcoin Hashrate Drop: VanEck Sees Bullish Signal for Price

VanEck analysts highlight that Bitcoin’s 4% hashrate drop, the sharpest since April 2024, historically signals a bullish price rebound, with past declines often followed by strong returns over the next three to six months.

VanEck analysts report that Bitcoin’s network hashrate fell 4% over the past month, marking the steepest decline since April 2024. Historically, such drops in hashrate have been followed by strong Bitcoin price rebounds over the next three to six months. Since 2014, 90-day forward returns were positive 65% of the time after a hashrate decline, compared to 54% when hashrate increased. Over 180 days, positive returns occurred 77% of the time after a hashrate drop, with an average gain of 72%. The recent hashrate compression is attributed to miner capitulation due to deteriorating profitability, lower Bitcoin prices, and increased competition from AI workloads. Mining profitability has worsened, with breakeven electricity costs for mid-generation rigs dropping from $0.12 to $0.077 per kilowatt-hour. Despite these pressures, VanEck’s analysis suggests that the current hashrate decline could signal a bullish outlook for Bitcoin, as similar patterns in the past have led to significant price recoveries.