According to Galaxy Research, Bitcoin mining difficulty has decreased by approximately 18.5% from its historical peak, marking the largest decline since the large-scale crackdown on Bitcoin mining in China in 2021.

The difficulty reflects the participation level of the total network hash power: a reduction of nearly one-fifth from high levels means that a considerable number of miners have exited or partially shut down due to the combination of post-halving coin prices, revenue per hash, and electricity costs. Historically, similar levels of difficulty reduction often correspond to a "surrender phase" in mining, where older models, cost-inefficient mines, and regions with high electricity prices are the first to be squeezed out, followed by new, lower-cost, and better-funded hash power filling the gaps.

From the perspective of miner economics, halving reduces block rewards by half, but difficulty and price do not necessarily adjust in sync. If the coin price lacks sustained increases post-halving, and transaction fee income has not stabilized, the income of a single mining machine will decline significantly faster than the adjustment of costs. Continuous difficulty reductions are the result of active exits and passive withdrawals of hash power, and they are also part of the network's automatic correction mechanism to maintain a target block generation interval of 10 minutes by adjusting block generation difficulty.

From an investor's perspective, the difficulty drop represents both a reshuffling of the mining industry and a redistribution of security costs. In the short term, a decrease in difficulty means a slight improvement in mining revenue per unit of hash power calculated at current coin prices, which helps lower-cost miners relieve pressure; in the long term, it depends on whether the exiting hash power is replaced by new investments, whether the geographical distribution of hash power becomes more concentrated or dispersed, and whether the power structure of mining pools changes. The difficulty metric itself does not directly determine coin prices but can affect miner sell pressure, industry capital expenditures, and market expectations of network security resilience.

Source: Public Information