Bitcoin’s Future: How a Mining Slowdown Could Signal a Bullish Turn
A recent slowdown in Bitcoin mining activity could possibly be setting the stage for a more constructive phase for the cryptocurrency, in keeping with a brand new report from asset manager VanEck. The firm said historical patterns suggest that periods of declining mining activity have often preceded positive returns for Bitcoin, at the same time as miners face mounting financial pressure.
Understanding the Relationship Between Hashrate and Bitcoin Returns
VanEck’s evaluation shows that since 2014, Bitcoin’s 90-day forward returns were positive 65% of the time when the network’s hashrate was contracting, compared with 54% when hashrate was expanding. This pattern suggests that declines in mining activity may signal capitulation amongst weaker operators, leaving the network in a healthier position over the long term.
The firm added that when hashrate compression persists for longer stretches, positive forward returns are inclined to occur more continuously and with greater magnitude. Some empirical evidence suggests drops in hashrate could be bullish for long-term holders, characterising the trend as a contrarian signal linked to miner exits during times of economic stress.
Current State of Bitcoin Mining
The latest data show that Bitcoin’s hashrate fell about 4% within the month through December 15, marking the sharpest monthly decline since April 2024. This decline in hashrate comes as mining profitability has deteriorated alongside recent weakness in Bitcoin’s price. VanEck noted that breakeven electricity costs for mid-generation mining rigs have fallen significantly over the past yr.
For instance, breakeven power costs dropped from around $0.12 per kilowatt-hour in late 2024 to about $0.077 by mid-December 2025. Breakeven electricity cost represents the utmost power price miners will pay without operating at a loss. A pointy decline on this threshold typically indicates worsening economics for the sector, as only miners with access to cheaper electricity can proceed operating profitably.
Institutional Buyers and Their Role
While miners face increasing strain, VanEck said longer-term institutional buyers have been absorbing supply throughout the recent pullback. The firm highlighted digital asset treasuries (DATs) as particularly energetic buyers over the past month. Between mid-November and mid-December, DATs purchased roughly 42,000 Bitcoin, representing a 4% month-on-month increase and lifting total holdings to about 1.09 million Bitcoin.
Looking ahead, VanEck suggested that many digital asset treasuries may shift their funding strategies. Rather than counting on common stock issuance, the firm expects some DATs to finance future Bitcoin purchases through the sale of preference shares, potentially reshaping how institutional demand supports the market.
Conclusion
In conclusion, the slowdown in Bitcoin mining activity could signal a bullish turn for the cryptocurrency. Historical patterns suggest that declines in mining activity have often preceded positive returns for Bitcoin. While miners face mounting financial pressure, institutional buyers have been absorbing supply, and changes in funding strategies may further support the market. As the Bitcoin market continues to evolve, it’s essential to think about these aspects and their potential impact on the cryptocurrency’s future.
