Bitcoin Mining Difficulty Surges 15 Percent in the Biggest Single Adjustment Since 2021 as Miners Battle Multi-Year Profit Lows

Bitcoin's mining difficulty rocketed 15% in a single two-week adjustment on February 20, 2026, climbing to 144.4 trillion. As of the time of writing, this is the largest percentage increase since 2021, when China's blanket mining ban triggered wild swings in the network's self-calibrating mechanism. The adjustment comes as miner profitability sits at multi-year lows and BTC trades around $67,000, roughly 47% below its October all-time high of $126,500.

The Biggest Difficulty Spike in Five Years

The Bitcoin network recalibrates its mining difficulty every 2,016 blocks, roughly every two weeks, to maintain an average block time of approximately 10 minutes. When more hash power enters the network, blocks are found faster, and difficulty rises. When miners go offline, difficulty drops.

This 15% jump follows a 12% decline in the previous adjustment period. That decline was triggered by a severe winter storm across the United States in early February that forced several major mining operations to scale back or shut down entirely. Hash rate plummeted from its peak of 1.1 zettahash per second (ZH/s) in October to approximately 826 exahash per second (EH/s) during the storm's worst days.

The network has since recovered to 1 ZH/s, and the difficulty algorithm responded in kind. The sheer magnitude of the rebound, 15%, reflects just how quickly industrial-scale miners brought capacity back online once grid conditions normalized.

Why Miners Are Running Harder for Less

The paradox at the center of this adjustment is that miners are deploying more hash power even as profitability deteriorates. Hashprice, the estimated daily revenue earned per unit of hash rate, sits at $23.9 per petahash per second (PH/s) at the time of writing. That figure represents a multi-year low.

Several forces are compressing margins simultaneously. Bitcoin's price dropped from $126,500 in October to a February low near $60,000 before recovering to the current $67,000 range. The April 2024 halving cut the block subsidy from 6.25 BTC to 3.125 BTC, slashing the base revenue miners earn per block. Meanwhile, transaction fees have not risen enough to offset the subsidy reduction.

Higher difficulty now compounds the problem. Each unit of hash rate earns a smaller share of block rewards when difficulty climbs. Miners who were barely profitable at 12% lower difficulty are now deeper in the red.

The AI Pivot Reshaping Mining Economics

Not every miner is doubling down on Bitcoin. A significant structural shift is underway as publicly listed mining companies reallocate energy and computing capacity toward artificial intelligence infrastructure.

Bitfarms (BITF) recently rebranded, removing "Bitcoin" from its corporate identity as it accelerates its AI data center strategy. Riot Platforms (RIOT) faces pressure from activist investor Starboard Value to expand into AI hosting and high-performance computing. These pivots reflect a cold calculation: the same energy and real estate that powers SHA-256 hashing can generate higher and more predictable revenue by serving AI workloads.

For miners that stay committed to Bitcoin, the competition intensifies. Those with access to stranded energy, flared gas, or sub-3-cent-per-kilowatt-hour contracts can still operate profitably. Everyone else faces a grinding squeeze that this difficulty adjustment has only worsened.

What This Means for Bitcoin's Security and Supply

From a network perspective, the difficulty surge is unambiguously bullish. Higher difficulty means more computational work is required to attack the network, making 51% attacks exponentially more expensive. With hash rate recovered to 1 ZH/s, Bitcoin's security budget, measured in raw computational power, remains near its all-time highs even as the price lingers well below the October peak.

The supply side of the equation matters for anyone holding BTC in a crypto card wallet or using it for daily spending. Difficulty adjustments do not change the issuance schedule directly: 3.125 BTC per block regardless. But extreme difficulty squeezes historically precede miner capitulation events, where less efficient operators sell treasury BTC to cover operational costs. These forced sales can create short-term price pressure.

The last major miner capitulation cycle occurred in late 2022, when hash price fell below similar levels and several operators, including Core Scientific, filed for bankruptcy protection. The current environment is not yet that severe, but the trajectory bears watching.

The Hash Rate Paradox and What It Signals

The hash rate recovering to 1 ZH/s despite terrible economics seems counterintuitive. Three factors explain it.

First, sunk costs. Mining operations that have already invested in hardware, real estate, and power purchase agreements cannot simply walk away. Fixed costs run whether the machines are on or off, so many operators mine at a loss on a cash basis to recoup some portion of their capital expenditure.

Second, geographic arbitrage. Operations in regions with extremely cheap electricity, parts of Texas during off-peak hours, Paraguay's Itaipu Dam surplus, Kazakhstan's subsidized industrial rates, can still turn a profit even at $23.9/PH/s hashprice. These operators absorb hash share as higher-cost competitors drop out.

Third, the UAE mining complex and other sovereign or quasi-sovereign mining operations mine for strategic reserves, not quarterly earnings. Their cost basis is less relevant than their long-term accumulation thesis.

What Happens Next

The next difficulty adjustment in roughly two weeks will reveal whether this 15% spike was a one-time snapback or the start of a sustained climb. If hash rate continues rising toward its 1.1 ZH/s October peak, difficulty will adjust upward again, further compressing margins.

For BTC holders using self-custody cards or managing portfolios through exchange-linked products, the mining difficulty cycle matters because it influences the behavior of a key cohort of natural sellers. Miners collectively earn approximately 450 BTC per day. When their break-even costs exceed the market price, that daily supply hits the open market faster than it otherwise would.

The intersection of the AI pivot, the post-halving revenue squeeze, and this historic difficulty spike creates a Darwinian pressure that will reshape the mining industry over the next several quarters. The operators that survive will emerge leaner, better capitalized, and more diversified. The ones that do not will add their hash rate to someone else's balance sheet.

FAQ

What does a 15% mining difficulty increase actually mean for Bitcoin users? It means the network requires 15% more computational work to find each block. For regular users, it has no direct impact on transaction speed or fees. The difficulty adjustment exists to keep block times near 10 minutes regardless of how much mining power joins or leaves the network.

Why did difficulty drop 12% before this spike? A severe winter storm across the United States in early February knocked significant mining capacity offline. Hash rate fell from over 1 ZH/s to approximately 826 EH/s. Once the storm passed and operations came back online, the network's difficulty algorithm corrected upward.

Could miner capitulation crash Bitcoin's price? Historically, miner capitulation events have contributed to short-term price declines but have not caused sustained crashes on their own. Miners produce approximately 450 BTC per day. While forced selling adds pressure, it represents a small fraction of total daily trading volume. The bigger risk is the signal it sends to the broader market about sentiment.

Why are mining companies pivoting to AI? AI workloads generate more predictable and often higher revenue per megawatt of power consumed. Mining companies already own the real estate, power infrastructure, and cooling systems needed for data centers. Repurposing that infrastructure for AI hosting can improve margins without the volatility of Bitcoin's price and difficulty cycles.

Overview

Bitcoin mining difficulty surged 15% to 144.4 trillion on February 20, 2026, the largest single adjustment since 2021. The spike followed a 12% decline caused by a U.S. winter storm that temporarily dropped hash rate to 826 EH/s. With hash rate recovered to 1 ZH/s but hashprice at multi-year lows of $23.9/PH/s, miners face a profit squeeze intensified by the April 2024 halving and BTC trading 47% below its October all-time high. The adjustment highlights a growing divergence: raw network security is near record levels, but the economic incentive to mine is the weakest it has been in years. Publicly listed miners like Bitfarms and Riot Platforms are increasingly redirecting capacity toward AI infrastructure, while sovereign-backed operations and low-cost miners absorb greater hash share.