JPMorgan says the Bitcoin network’s hashrate declined for a second consecutive month in December 2025, interpreting the move as a sign that mining competition is easing amid worsening economics for operators.
Mining Profitability Hits Record Lows
According to JPMorgan, daily block reward revenue per exahash fell to a record low in December, dropping 7% month over month and 32% year over year. The decline reflects the combined impact of lower fee income, tighter margins, and sustained operating costs, which together have pressured miner profitability.
INSIGHT: JPMorgan has noted that the Bitcoin network hashrate fell for a second straight month in December, signaling easing competition among miners.
— CoinDesk (@CoinDesk) January 5, 2026
The firm notes that shrinking returns per unit of hashpower often force high-cost miners to make difficult decisions, either shutting down less efficient rigs or selling Bitcoin reserves to cover expenses.
Hashrate Compression Signals Miner Stress
The two-month pullback in hashrate points to mounting stress across the mining sector, particularly among operators with weaker balance sheets. As competition eases, the network sheds inefficient participants, a process JPMorgan characterizes as typical during periods of prolonged margin compression.
While this environment is challenging in the near term, it has historically produced a notable market dynamic.
A Potential Contrarian Setup
JPMorgan highlights that extended hashrate compression and miner capitulation have often acted as a bullish contrarian signal. In past cycles, these phases tended to precede price recoveries by clearing out inefficient supply and reducing forced selling over time, conditions that can improve market structure for longer-term holders.
Price Holds Firm Despite Pressure
Despite the stress on miners, Bitcoin’s price climbed to its highest level in four weeks, trading around $93,900 as of January 5, 2026. The divergence, rising price alongside falling hashrate, suggests that broader market demand has, for now, outweighed near-term mining headwinds.
JPMorgan’s Broader Outlook
Looking ahead, JPMorgan argues that the balance sheet strength and long-term strategies of major listed mining companies matter more for Bitcoin’s trajectory than short-term miner stress alone. Well-capitalized operators with disciplined treasury management are better positioned to weather periods of low profitability without amplifying sell pressure.
In that context, the bank views December’s hashrate decline as a sign of structural adjustment rather than systemic weakness, with implications that could ultimately prove supportive if the shakeout continues to run its course.
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