Bitcoin mining difficulty surged by approximately 15% to reach 144.4 trillion as of February 20, according to data from CoinWarz. This adjustment fully compensates for the 11% decline observed earlier in the month, marking the most significant drop since China implemented its mining ban in 2021. The prior decline was triggered by severe winter storms that swept across the United States in late January, which disrupted power grids and forced major mining facilities to temporarily halt operations.
During this period, the network”s hashrate plummeted to around 198 exahashes per second (EH/s) from nearly 400 EH/s. However, as mining operations resumed following the stabilization of weather conditions, the total network hashrate began to recover. The Bitcoin protocol adjusts mining difficulty approximately every 2,016 blocks, or roughly every two weeks, to maintain an average block production time of ten minutes. When there is a sharp decline in hashrate, as experienced during the storms, the protocol lowers the mining difficulty to stabilize block production. Conversely, when computing power returns to the network, the difficulty is increased again.
As American miners restarted their operations, the network”s hashrate increased, prompting a 15% upward adjustment in difficulty. While this increase enhances the security of the network, it also places additional operational pressures on miners. The process of generating block rewards becomes more resource-intensive, which can strain the profit margins of operators who are already facing high energy costs.
Interestingly, the enforced downtime did not necessarily result in financial losses for all miners. Many miners in the U.S. participate in demand response programs that allow them to sell contracted electricity back to the grid during peak pricing events. For instance, LM Funding America reported that it was able to redirect power to the grid during Storm Fern, generating revenue that amounted to more than a quarter of its typical quarterly income from energy supply and consumption reduction initiatives. Additionally, mining equipment manufacturer Canaan Inc., which has facilities in the U.S., confirmed that its operations reduced power consumption in collaboration with grid partners during the storm-related stress periods.
Since the mining ban in China back in 2021, the United States has emerged as the largest hub for Bitcoin mining globally. Major mining operations are concentrated in states like Texas and Georgia, which offer favorable regulatory environments and robust energy infrastructure. According to data from the Cambridge Centre for Alternative Finance, the U.S. now accounts for over one-third of the global Bitcoin hashrate. The recent storm incidents highlighted both the vulnerabilities and the adaptability of the mining sector. While the geographical concentration of mining operations means that extreme weather events can temporarily disrupt global output, the swift recovery to a difficulty of 144.4 trillion demonstrates how quickly the network can regain stability once conditions normalize.
This situation underscores a broader trend: Bitcoin mining is increasingly intertwined with regional energy systems. Although this creates exposure to local disruptions, it also positions miners as flexible energy participants capable of helping balance grid demand during crises.
