Are Bitcoin miners surrendering a bottom signal? Hashrate drops 4%, institutions turn bullish

VanEck’s latest report shows that as of December 15, 2025, Bitcoin hashrate has decreased by approximately 4% over the past month, marking the largest drop since April 2024 and indicating that Bitcoin is experiencing a “Bitcoin miner capitulation” phase. Historical data shows that when Bitcoin network hashrate declines within a 30-day cycle, there is about a 65% chance that the price will rise within the following 90 days.

What is Bitcoin miner capitulation? Why is a 4% hashrate decline so significant?

(Source: Glassnode)

Bitcoin miner capitulation refers to the phenomenon where, when mining costs exceed revenues, Bitcoin miners are forced to shut down mining machines, sell Bitcoin, or exit the market. This 4% hashrate decline may seem small, but it is highly significant in the Bitcoin network because hashrate represents the total computational resources contributed by miners worldwide. A decline indicates that many miners are stopping mining due to losses.

The main reasons causing miner capitulation include: falling Bitcoin prices reducing mining rewards, rising electricity costs squeezing profit margins, and difficulty adjustments making competition more intense. When these factors occur simultaneously, less efficient miners tend to exit first, leading to a decrease in hashrate. Currently, Bitcoin price has fallen below $87,000, about 31% below the all-time high of $126,080 reached in October 2025, with many Bitcoin miners’ costs approaching or exceeding the current price.

From a technical perspective, a decline in hashrate triggers the Bitcoin network’s difficulty adjustment mechanism. When hashrate drops, mining difficulty automatically decreases in the next adjustment cycle (about every two weeks), making it easier for remaining miners to find blocks and increasing their profitability. This self-regulating mechanism ultimately attracts miners back into the market, forming a new equilibrium.

Historical statistics reveal: the astonishing rebound probability after miner capitulation

Since 2014, whenever Bitcoin network hashrate declines within a 30-day cycle, there is about a 65% chance that Bitcoin price will rise within the next 90 days, with the probability increasing to 77% within 180 days, and an average increase of about 72%. This indicator has historically been viewed as a bullish contrarian signal because miner capitulation often signals that the market has approached a cyclical bottom.

The most recent miner capitulation occurred in mid-October 2024, when Bitcoin hovered around $73,800 amid bearish sentiment. Within just two months, Bitcoin surged to $108,000, a 46% increase. Similar situations appeared during market lows in 2018 and 2020, where Bitcoin prices experienced significant rebounds after miner capitulation.

The case at the end of 2018 was particularly dramatic. Bitcoin’s price plummeted from a high of $20,000 to $3,200, with many Bitcoin miners shutting down due to losses, causing a significant drop in hashrate. However, this capitulation marked the final dip of the bear market, after which Bitcoin entered a two-year bull run, eventually surpassing $60,000 in 2021. During the March 2020 COVID-19 panic sell-off, hashrate also temporarily declined but was quickly followed by an epic rebound.

Why is miner capitulation a buy signal? The key lies in supply and demand logic. When Bitcoin miners shut down due to high mining costs, the newly issued Bitcoin supply in the market decreases. Meanwhile, after the capitulation phase, selling pressure from miners gradually subsides, and demand begins to recover, creating favorable conditions for price rebounds. Additionally, miner capitulation often coincides with extreme market pessimism, which itself is a contrarian indicator.

Market logic behind the rise of solo miners

In the past week, multiple blocks have been mined by solo miners, which is extremely rare historically. On December 19, a solo miner using only about $100 worth of hashrate mined block 928351 on the NiceHash platform, earning 3.152 BTC worth approximately $271,000. On December 23, another solo miner mined block 928985, earning 3.128 BTC worth about $281,000.

The surge in solo mining is closely related to recent hashrate declines. When large mining farms shut down some of their equipment due to losses, the overall network hashrate decreases, causing mining difficulty to drop. This increases the probability of solo miners successfully mining blocks. Although solo mining remains a low-probability event, these cases highlight the current market features during the Bitcoin miner capitulation phase.

This phenomenon also reflects the fragmentation within the Bitcoin mining community. Large mining farms benefit from economies of scale but face huge losses during price downturns, forcing them to reduce hashrate investments. In contrast, solo miners, with lower costs and often viewing mining as a “lottery-style” speculation, become more active in this environment.

Diverging institutional forecasts: optimistic vs. pessimistic outlooks

Institutions like Grayscale, Bernstein, and VanEck expect Bitcoin prices to rebound soon. Grayscale and Bernstein forecast Bitcoin reaching new all-time highs in 2026, while VanEck suggests Bitcoin may already be near the bottom. Their optimism is partly based on historical patterns of miner capitulation and the loose monetary environment following two Fed rate cuts in the past three months.

However, Barclays takes a pessimistic view for 2026. The bank predicts that due to declining spot trading volume and weak demand, the cryptocurrency market will face more challenges in 2026. Under this scenario, Bitcoin prices could further decline. Barclays’ concerns mainly stem from macroeconomic uncertainties, including persistent inflation, Fed policy shifts, and slowing global economic growth.

How should investors respond to miner capitulation signals

• Gradual accumulation strategy: Historical data shows a high probability of rebound, but timing is hard to predict precisely. It is advisable to buy in stages to reduce risk.

• Monitor hashrate changes: Keep tracking Bitcoin network hashrate data. If hashrate stabilizes and begins to rise, it may signal a market bottom.

• Set stop-loss protections: Despite high historical success rates, market uncertainties remain. Avoid over-investing and set reasonable stop-loss levels.