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According to Bitcoin Core developer Peter Todd, approximately 10% of the global hashing power has been turned off in recent days.
This is likely to be a direct response to the market downturn that has squeezed profit margins for miners.
"Hash power follows price reasonably closely," Todd explained on X (formerly Twitter).
A major difficulty drop
Recent data shows that there has been a significant "miner capitulation" event over the last 90 days. It has culminated in a sharp drop in difficulty to 125.86 T.
On Nov. 11, for comparison, difficulty sat at a local high of 155.97 T.
The difficulty has dropped so low that the remaining miners are now clearing blocks too quickly (8.92 minutes). This has set the stage for a massive 12.15% upward correction in two weeks.
A plunge in profitability
In the meantime, a key metric for Bitcoin mining revenue has fallen to its lowest level on record, according to a recent report by Bloomberg. This is due to a combination of crashing cryptocurrency prices and soaring energy costs.
The "hash price" index, which measures the revenue value per unit of computing power, dropped to approximately 3 cents per terahash.
This revenue collapse has forced major mining outfits to power down their equipment.
The downturn has severely impacted the stock performance of major mining companies. Major mining firms such as CleanSpark, Terawulf, MARA Holdings, and Riot Platforms are seeing significant declines.
Severe winter storms across the U.S. have made the predicament even worse. They have adversely impacted major mining hubs like Texas and Tennessee. In these states, rising power costs and outages have forced operators to curtail production.