The state of Bitcoin mining: Hashrate peaks, difficulty drops, and weather defines the margins

Bitcoin’s mining infrastructure has expanded significantly this year. The 7-day average hashrate climbed over 900 EH/s in July, setting a new all-time high. However, a more interesting fact than the spike in hashrate is that this expansion has been met with a softening mining difficulty. This rare decoupling has allowed miners to increase revenue and margins even as fees fell to multi-year lows.

However, beneath the surface, operational limits are being tested. The Texas ERCOT grid is under pressure from record-breaking summer heat and power demand in the US. Meanwhile, southern China has faced the heaviest rainfall in decades, causing widespread flooding and disruption to hydroelectric output in provinces that host substantial mining activity. These external stressors are now playing a decisive role in shaping the pace and profitability of mining, while Bitcoin’s price and on-chain activity are becoming much less influential than before.

In this report, CryptoSlate will examine the implications of protocol metrics, energy markets, and infrastructure constraints in the mining sector. We will contextualize miners’ current economic state, outline the risks that could disrupt network growth, and offer a forward-looking view into Q3 and beyond.