On February 20, 2026, Beijing time, the Bitcoin network completed a new round of difficulty adjustment, raising the difficulty by about 14.73%–15% all at once, reaching a level of about 144.4 T. This is the largest single increase since the mining ban in China in 2021. Correspondingly, the total network hashrate, which had previously dropped about 12% due to the U.S. winter storm, quickly recovered and is now back to about 1 ZH/s, with a 7-day average hashrate of about 1.05 ZH/s. However, the hashrate price has fallen to a multi-year low of about 23.9 USD/PH/s. The surge in difficulty has strengthened network security and attack resistance, yet against the backdrop of Bitcoin prices oscillating between 60,000 and 67,000 USD, miners' profit margins are further squeezed, intensifying the contradiction between miners' profitability pressures and enhanced network security. This article will analyze this historic difficulty increase from several paths, including the recovery of hashrate, the freezing hashrate price, the redistribution of security dividends, and miners transitioning to AI and other high-performance computing.
Difficulty Hits a Five-Year High: Calibration Behind the Recovery and Surge
● Rare Increase: On February 20, 2026, the Bitcoin network's difficulty was raised by about 14.73%–15%, to approximately 144.4 T. Under a bi-weekly adjustment mechanism, such a near 15% single adjustment is extremely rare and is directly defined by the market as "the largest increase since the mining ban in China in 2021." It not only breaks a nearly five-year record but also indicates that the network has made a strong calibration after block generation speed was recently significantly faster than the target value.
● Rapid Hasrate Recovery: According to a single data source, the current total network hashrate has recovered to about 1 ZH/s, while the average hashrate over the past 7 days is roughly 1.05 ZH/s, demonstrating the swift restart of mining machines and restoration of power supply after the winter storm. The hashrate climbing back to near historical high levels within a short period is the direct technical reason behind this round of significant difficulty increase, also reflecting the repair speed of the overall online rate and available capacity of mainstream mining companies.
● Historical Event Positioning: Market sentiment commonly refers to this adjustment as "the largest difficulty increase since the mining ban in China in 2021," placing this challenge in the context of longer-term regulation and geographical migration. The large-scale shutdowns back then caused a plunge in hashrate, while this time, following the global restructuring of mining sites, North America and other places have become new hubs and the network has seen such a significant upward adjustment for the first time at a high base, highlighting the historical significance of the event.
● Strong Rebound After the Winter Storm: Not long ago, the U.S. experienced a winter storm, damaging power grids and limiting loads in some areas, resulting in a roughly 12% drop in the total Bitcoin hashrate. This round of difficulty increase is essentially a lagging acknowledgment captured at the protocol level reflecting a strong rebound in hashrate: as affected areas restored power and large-scale mining facilities came back online, the hashrate not only recouped its losses but also slightly exceeded them, driving the difficulty to be significantly increased during this window period.
Hashrate Price at a Low Point: Prices at 60,000 but No Change for Miners in Winter
● Years Low Hasrate Price: The current hasrate price for Bitcoin mining is about 23.9 USD/PH/s, at a multi-year low. Hasrate price can be roughly understood as the expected income of unit hashrate over unit time, influenced by block subsidies, transaction fee income, and cryptocurrency prices. Under the premise of rising difficulty and relatively fixed block rewards, a decline in hasrate price signifies that the same hashrate yields less Bitcoin and fiat income.
● Disconnection Between Price Rise and Miner Revenue: Bitcoin has still been oscillating in the range of 60,000–67,000 USD, which is relatively high historically, yet the hasrate price has not risen in tandem, instead being continuously diluted amid rising difficulty and hashrate. This divergence pattern of “price not weak, yet miners not making money” indicates that in an environment where block rewards are constant and market competition is intensifying, price increases do not necessarily translate directly into improved profitability for miners.
● Profit Margins Squeezed from Both Ends: Comments from multiple media and research institutions point out that with hasrate prices at multi-year lows, "miners face severe profit challenges." On one hand, the rise in difficulty and hashrate makes the amount of coins produced by machines of equal power decrease; on the other hand, the price oscillation limits the upward elasticity on the income side. The dual squeeze of difficulty and cost makes it difficult for the previously successful one-sided profit model to sustain, leading to a shift towards refined management and hedging strategies.
● Cost Structure and Survival Pressure on Small and Medium Miners: During the down cycle of hasrate prices, rigid expenditures such as electricity costs, machine depreciation, operational labor, and rental costs have increased, putting additional pressure on miners. For small and medium miners with limited scale and restricted financing channels, cash flow lacks buffering space, increasing the likelihood of older models being forced to shut down, sell, or relocate to areas with lower electricity prices. The combination of high difficulty and low hasrate prices has objectively accelerated the industry's cleansing pace, eliminating inefficient and cost-marginalized participants.
Rising Difficulty and Security Dividends: Miners' Contributions Benefit the Whole Network
● Significant Increase in Attack Costs: From a technical perspective, an increase in difficulty essentially means that more total network hashrate is needed to maintain the established block generation speed, directly raising the threshold for launching malicious hashrate attacks. Whether it's the commonly discussed 51% attack or the more covert reorganization attack, under the current environment of approximately 1 ZH/s hashrate and 144.4 T difficulty, the required hardware investment, electricity expenses, and operational costs for attackers will rise exponentially, enhancing the overall security of the network.
● Production Expansion Logic Behind Hasrate Recovery: The recovery of hashrate did not occur in a vacuum; it likely reflects continuous expansion of machine installation and optimization of data centers and electricity contracts by large mining companies in recent times. As prices operate within a high range and the capital markets reassess the risk pricing of mining businesses, some leading mining facilities have obtained new financing and equipment upgrade opportunities, pushing the latest generation of chips online and relocating older machines to low electricity price areas, thus forming an "expansion feedback chain" of synchronized growth in hashrate and difficulty.
● Public Good Tension: Security Dividends vs. Cost Burden: The security of the Bitcoin network possesses classic "public good" characteristics— all holders and users directly benefit from the raised attack costs, but the main bearers of electricity and equipment costs are miners. In the current environment of low hasrate prices alongside rapidly rising difficulty, security dividends are spread across all on-chain participants, while the reality of profit compression is almost entirely borne by miners' balance sheets, amplifying the structural contradiction of "costs being privatized while benefits are public."
● Cleansing and Centralization Risks: If Bitcoin prices remain stagnant in the 60,000–67,000 USD range for an extended period while difficulty remains high or continues to rise, miners with marginal costs close to or above hasrate prices will inevitably be forced to exit. This will increase industry concentration, further consolidating hashrate towards leading mining companies with stronger capital strength and higher operational efficiency. In the short term, this may stabilize the network, but from a long-term perspective, excessive centralization may bring governance and collusion risks, undermining the persuasive narrative of Bitcoin's "decentralized security."
Miners Turning to AI Computing: An Escape Route or New Track
● Transformation Directions of Listed Mining Companies: Against the backdrop of narrowing mining profit margins, several listed mining companies have begun to lay out AI reasoning, training computing, and general high-performance computing businesses. Since the briefing did not disclose specific company-level revenues and installation scale data, we can only gauge from a directional perspective—miners hope to introduce cloud computing rental and enterprise-oriented computing services to reduce reliance on single mining operations and build diverse revenue streams.
● Switching Advantages from Commonalities in Infrastructure: Bitcoin mining and AI computing business share a high degree of commonality in terms of hardware and infrastructure: both rely on high-performance chips, large-scale data centers, power and cooling systems, and mature operational and network access capabilities. Although mining uses dedicated ASICs and AI relies more on GPUs/dedicated acceleration cards, the experience and existing assets accumulated by miners in terms of rack, power ratio, cooling, and data center site selection provide a feasible foundation for “transitioning” or “enhancing” towards AI.
● Differences in Cash Flow Structures and Bargaining Power: Compared to the highly volatile price-based mining business, AI and high-performance computing often secure part of their demand through long-term contracts, theoretically allowing for more predictable cash flow. Enterprise clients and institutions have a rigid demand for stable computing resources, and contract cycles and service level agreements (SLAs) enhance miners' bargaining power. However, at the same time, the AI business faces fierce competition from cloud service providers and pressure from technological iterations, making order acquisition and renewal uncertain, possibly leading some miners to bear different types of operational risks in new businesses.
● Unverified Data and Rational Expectations: Currently, claims such as "some mining company has secured multi-million dollar AI contracts" or "miners are facing hundreds of billions in AI capital expenditures" remain largely unverified; the briefing especially categorizes relevant figures as not directly credible information. When investors and industry observers evaluate the prospects of miners transitioning to AI, these figures should be treated as hypothetical scenarios rather than established facts, returning focus to financial report disclosures and actual production capacity delivery rhythms to judge the effectiveness of the transition based on data.
Market Sentiment and Capital Game: Mismatch Between Prices and Mining Stocks
● Timing of Price Range and On-chain Fundamentals: Over the past period, Bitcoin prices have roughly maintained oscillation within the 60,000–67,000 USD range, while this wave of difficulty surged on February 20, 2026, immediately following the strong recovery of hashrate from the winter storm low. This sequence of events implies that the high price oscillation has provided a “risk premium buffer” for expansion, but the ensuing difficulty adjustment quickly consumes this premium, causing miners to face profit compression at the previously unchanged price level.
● Capital Redefining Various Asset Classes: In an environment characterized by "high difficulty + low hashrate price", capital markets have begun to re-evaluate various mining-related assets — the relative values between spot Bitcoin, mining company stocks, as well as hashrate contracts and related derivatives have been repeatedly tugged. Some capital opts to directly allocate BTC, enjoying security dividends without bearing operational risks; others hedge or amplify judgments on the mining profit cycle by buying or shorting mining stocks, turning mining into a leveraged tool for betting on changes in on-chain fundamentals in the secondary market.
● Divergence in Mining Stock Trends: In this environment, the price performance of mining stocks may show a clear mismatch with spot Bitcoin. One scenario is “price rises, stock price does not follow”: the market perceives difficulty and costs eroding miners' profits, making it difficult for mining stocks to enjoy the same degree of increase; another is the “premium bet on AI transformation”: companies that have publicly laid out AI and high-performance computing may obtain higher valuations based on narrative despite lacking short-term profit support, causing stock prices to uncouple from the fundamentals of traditional mining operations.
● Retail and Institutional Diverging Interpretations: Facing the combination of high difficulty and low hashrate prices, some retail investors view this as a “top warning signal,” worrying that miners' selling pressure and network centralization risks will manifest in price; while some institutional investors may see it as a window for leading hashrate players to consolidate industry resources, betting on long-term returns brought by scale effects and transformation capabilities by increasing holdings in top mining company stocks or hashrate assets. This interpretive difference intensifies market sentiment divergence and volatility.
New Normal of High Difficulty: The Game in the Second Half of the Hashrate Industry
● Multiple Components of High-Pressure Environment: This difficulty surge of about 14.73%–15% to 144.4 T, combined with hashrate rebounding to about 1 ZH/s and hashrate price plummeting to about 23.9 USD/PH/s at multi-year lows, together constitutes the high-pressure environment currently faced by miners. While security indicators on-chain appear healthier, the profit margin available to miners has been significantly compressed, leading the industry to transition from "extensive growth" towards "refined management" and "diverse profitability".
● Key Short-Term Observations: Within the next one to several difficulty cycles, three dimensions warrant close attention: first, how the exit rhythm accelerates for miners with high marginal costs and the changing proportion of shutdowns among older machines and small and medium-sized mining operations; second, whether mining stocks continue to decouple from price performance in the secondary market, especially the valuation differences between companies following different transformation paths; third, whether Bitcoin prices can be maintained above the level sufficient to cover current difficulty levels or are supported by new capital inflows and increased trading activity to sustain miners' cash flows.
● Medium-Long Term Structural Judgment: From a longer time perspective, Bitcoin mining business is likely to evolve towards a "dual-drive" model of "security + AI computing". The role of miners is transforming from a single "coin producer" to a comprehensive computing service provider—maintaining network security and obtaining block rewards at the base level while engaging in a broader digital infrastructure build through connections to AI, research, and high-performance computing needs. This evolution will profoundly alter the commercial models and capital structures of the industry.
● Continuous Vigilance on Data and Risks: In the intertwined phase of high difficulty new normal and transformation narratives, the market is flooded with noise regarding AI order scales and capital expenditure needs. Readers should exercise caution when interpreting various mining company stories, viewing unverified contract amounts and expenditure plans as hypotheses rather than conclusions. More importantly, by continuously tracking key data such as hashrate prices, difficulty levels, hashrate, and mining company financial reports, dynamically assess changes in miners' profitability and industry concentration, avoiding being swayed by a single narrative in judgment.
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