Bitcoin mining difficulty plunges after U.S. winter storm, largest single adjustment since China’s 2021 crackdown

The Bitcoin network saw a sharp, protocol-level response after total hashing power fell suddenly, triggering an 11.16% difficulty reduction to about 125.86 terahashes. Block production slowed, with average intervals stretching beyond the ten-minute design point and briefly exceeding 11 minutes. Winter Storm Fern in the United States was a proximate cause: grid disruptions and curtailed power forced many mining facilities to throttle or pause operations, producing a concentrated hashrate shock. Foundry USA — one of the largest mining pools — reported a precipitous decline in contributed hashpower of roughly 60%, sliding from near 400 EH/s to about 198 EH/s before largely recovering toward previous levels. That rapid pool-level swing amplified network volatility and fed directly into the downward difficulty retarget. At the same time, broader market and operational dynamics are reshaping the supply of hashing capacity: seven-day average network hashrate has fallen below 1,000 EH/s from October peaks, and some operators are redirecting power and equipment toward AI and other high-performance computing workloads that can offer superior margins. Market-derived hashprice has ticked upward in recent weeks (roughly $37.15 → $40 per petahash per day), which improves per-unit returns even as aggregate capacity contracts, creating a sharper trade-off for operators. Financial stress is visible in behavior: some miners have been selling BTC reserves to cover power, debt and operational needs, while others explore converting grid-connected campuses into AI/HPC colocation to monetize stranded power and cooling. Conversion opportunities are real but encumbered by hardware bottlenecks, OEM lead times, packaging/test constraints and permitting risks, making outcomes and timing uncertain. CoinWarz currently projects another roughly 10.4% difficulty decrease at the next adjustment, which would push the target toward ~112.7 terahashes if current outages persist. Short-term effects include slower transaction throughput and longer confirmation waits; over the medium term, repeated large adjustments could signal heightened margin stress and accelerate consolidation to larger, better-capitalized operators or those with diversified revenue streams. Observers — from infrastructure planners to regulators and investors — should monitor hashrate, difficulty, hashprice, miner balance sheets and disclosed AI/HPC deals to judge whether this episode is a temporary dislocation or the start of structural reallocation of proof-of-work resources.