Mining Difficulty Drops Sharply - Worst in Months What happened to the mining operations? The Bitcoin mining difficulty recently dropped sharply by 7.7% to 133.79 trillion on March 20th, one of the most severe drops since the beginning of the year! Mining Difficulty is the level of computing power the Bitcoin system assigns to miners to mine a new block. The system automatically adjusts every 2,016 blocks (approximately 2 weeks) to ensure a consistent block release every 10 minutes. When Difficulty drops, it means the total computing power on the network is decreasing; miners have unplugged their devices. 1) April 2024 — The 4th Halving occurred. The mining reward per block was halved from 6.25 to 3.125 BTC, while the cost remained the same. 1) Revenue halved. 2) Early 2026 — BTC price was around $70,600, with research from Cambridge University estimating the average mining cost at around $87,000-$101,000 per coin. This means many miners were losing money on every BTC they mined. 3) February 2026 — Difficulty dropped for the first time, by 11.16%, the most severe drop of the year, partly due to storms in the US that disrupted large mining farms. But it rebounded 14.7% after the weather improved. . 4) Around the same time — the giants began moving out. Core Scientific signed a $10.2 billion contract with CoreWeave (an AI company) to convert its data center from Bitcoin mining to providing GPU services for AI; Hut 8 signed a $7 billion AI infrastructure contract; and Cipher Mining cut its mining power by 51% to focus entirely on AI. . 5) February 21, 2026 — Bitdeer (a Bitcoin mining company listed on Nasdaq) sold all of its reserve 943 BTC, leaving it with zero BTC. As of March 21, it confirmed that it still holds zero BTC — a Bitcoin mining company that doesn't hold Bitcoin. 6) March 20–21, 2026 — Difficulty dropped again by 7.76% to 133.79 trillion. The average block time stretched to 12 minutes and 36 seconds, from a target of 10 minutes. The system automatically adjusted the difficulty level. This is a sign that actual miners are abandoning their equipment, not just that it's a temporary shutdown. Ran Neuner, a trader and co-founder of Crypto Banter, posted on X that AI has become the most formidable competitor to Bitcoin mining because both industries are vying for the same thing: electricity. Bitcoin mining generates approximately $57–129 per megawatt, while AI data centers earn up to $200–500 per megawatt from the same infrastructure. Meanwhile, CoinShares (a digital asset research firm) predicts that revenue from Bitcoin mining by companies that sign contracts with AI will shrink from 85% of total revenue in early 2025 to less than 20% by the end of 2026. Willy Woo, a prominent on-chain analyst, argues that electricity prices don't directly affect the stability of the Bitcoin network because the Difficulty Adjustment system is designed to handle such situations — if miners can't tolerate the high prices, they leave, the remaining miners get a larger share, and the network continues to function. The Bitcoin network itself remains strong. Blocks are still being released every 10 minutes, but the people who used to manage it are changing hands — from miners who believed in Bitcoin to miners who pay the most. The next difficulty adjustment is expected in early April, and preliminary figures suggest a further decrease of approximately 0.7%. This isn't the end of the story — stay tuned 👀