VanEck: Miner Capitulation, 4% Hashrate Drop Signal BTC Upside
Bitcoin’s network hashrate declined 4% over the month to Dec. 15, a move that VanEck analysts say has historically preceded price gains as miner capitulation can serve as a bullish contrarian indicator.
“When hash rate compression persists over longer periods, positive forward returns tend to occur more often and with greater magnitude,” VanEck crypto research lead Matt Sigel and senior investment analyst Patrick Bush wrote in a report on Monday.
Since 2014, Bitcoin’s 90-day forward returns were positive 65% of the time when the network’s hashrate fell over the prior 30 days, compared with 54% when hashrate increased, the analysts noted.
The pattern was similar over a longer horizon: periods of negative 90-day hashrate growth were followed by positive 180-day Bitcoin returns 77% of the time, with an average gain of 72%, versus a 61% rate of positive returns when hashrate rose over the same span.
The trend could aid Bitcoin (BTC) miners if higher prices improve margins or allow previously unprofitable operations to restart. Bitcoin is trading at $88,400, down nearly 30% from its Oct. 6 all-time high of $126,080, according to CoinGecko.
Bitcoin miner breakeven prices drop by over 35%
Sigel and Bush said the breakeven electricity price for a 2022-era Bitmain S19 XP miner, a widely used Bitcoin mining rig, has fallen nearly 36% from $0.12 per kilowatt-hour (kWh) in December 2024 to $0.077/kWh as of mid-December, underscoring challenging conditions for miners.
The analysts added that the 4% hashrate decline, the sharpest since April 2024, was likely influenced by the shutdown of roughly 1.3 gigawatts of mining capacity in China.
They also said some of this power may be redirected to meet growing AI demand, a shift they estimate could reduce Bitcoin’s hashrate by about 10%.
Nation-states continue to support Bitcoin mining
Despite regional retrenchment, Sigel and Bush estimate that up to 13 countries now support Bitcoin mining activities. These include Russia, France, Bhutan, Iran, El Salvador, the UAE, Oman, Ethiopia, Argentina, Kenya, and Japan.
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