The crypto winter is not an adjective; is the harsh climate the main culprit behind the impact on coin prices?

Does the crypto winter have a connection to extreme weather? Earlier this year, North America experienced a severe cold winter storm, putting pressure on power systems in many areas. Some mining farms were forced to suspend operations, further worsening the already strained Bitcoin mining industry. The operating environment for miners clearly deteriorated, with Bitcoin’s revenue per PET dropping from about $70 at its peak to $35, nearly halving. Under the dual impact of falling BTC prices and extreme weather, the network’s total hash rate significantly declined, with mining difficulty decreasing by approximately 11%, marking the largest drop since China’s crackdown on mining in 2021.

Extreme weather impacts causing power outages and mining farm shutdowns

Power outages triggered by winter storms in the United States have become a major external factor contributing to recent declines in Bitcoin’s hash rate. Due to extreme low temperatures, power supply and internet stability were affected in many regions, forcing some mining farms to halt operations. A large number of mining machines went offline, causing a noticeable short-term drop in the network’s hash rate. In this context, Bitcoin mining difficulty recently decreased by about 11%, the largest decline since China’s mining crackdown in 2021. Mining difficulty, a core indicator of how hard it is to produce new blocks, is adjusted approximately every two weeks based on hash rate changes to maintain an average block time of 10 minutes; when hash rate plunges, the system lowers difficulty to keep the network stable.

Bitcoin miner revenue deteriorates

The loss of hash rate also reflects a worsening operating environment for miners. Since Bitcoin’s price peaked at around $126,000 in October, it has fallen sharply and is now hovering around $69,500, directly compressing mining profits. Measured by hash price, revenue per terahash has dropped from nearly $70 at its peak to just over $35. For miners with less efficient equipment and higher energy costs, profit margins are shrinking rapidly, forcing some farms to shut down or scale back, further reducing hash rate. Data from Blockchain.com shows that after the latest difficulty adjustment, mining difficulty decreased from over 141.6 trillion to about 125.86 trillion, indicating a significant reduction in active mining machines supporting the Bitcoin network.

Will winter storms impact Bitcoin? The crypto winter may persist!

Extreme weather could also be a factor influencing Bitcoin’s price. Severe winter storms in Texas and other regions led grid operators to request large electricity consumers to reduce load, causing some public mining farms to scale back operations. In some cases, daily Bitcoin production dropped by over 60%.

In this scenario, some mining companies are beginning to adjust their long-term strategies, shifting toward high-performance computing and AI-related businesses. For example, Bitfarms (BITF) announced it will no longer be just a Bitcoin miner but will develop AI and data center services. The market responded positively, reflecting investor interest in diversified business models.

Although difficulty reductions are often seen as signs of industry pressure, they are fundamentally a self-regulation mechanism. For miners still online, reduced competition can improve profitability per unit of hash power, helping to sustain operations. Historical experience shows that large difficulty drops are often accompanied by miners selling Bitcoin to cover costs, which can lead to a “miner capitulation phase.” Afterward, prices may gradually stabilize or even rebound.

This article: “Crypto Winter” is not an adjective; severe climate may be the real culprit behind price impacts. First published by Chain News ABMedia.