Bitcoin's network hashrate declined in Q1 2025, the first quarterly drop in six years, as miners reallocate computing resources toward AI applications. Roughly half of all circulating Bitcoin is now held at a loss relative to purchase price, and long-term holders are actively selling at a loss. Bitcoin is approaching a six-month losing streak that would tie its all-time record.
A falling hashrate signals that professional miners — the backbone of Bitcoin's security and price support — are losing conviction and redirecting capital to more profitable AI workloads. When half of all holders are underwater and long-term believers are capitulating, it removes a key demand floor. Combined with rising real interest rates reducing appetite for speculative assets, this is a structurally weak setup for BTC and correlated crypto assets like ETH and crypto-equity plays like MSTR and MARA.
Monthly CPI inflation report (watch for real interest rate direction). Next Fed rate decision and forward guidance. Any major Bitcoin exchange flow data or miner capitulation metrics on-chain. Q2 2025 hashrate data release.
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