Bitcoin mining experiencing first-ever hashrate bear market as publicly listed miners shift capital toward AI and HPC infrastructure.
AI & Agents ·
Rapha Zagury, CEO of Tether-backed Bitcoin treasury company Twenty One Capital, declared at Bitcoin Asia 2026 that Bitcoin is undergoing its first-ever "hashrate bear market." The network's hashrate peaked near 1.3 ZH/s at year-end before entering a steady decline, representing the longest recovery cycle from an all-time high in the asset's history.
Zagury distinguished the current downturn from the 2021 hashrate contraction that followed China's mining restrictions, when operators largely migrated operations to other jurisdictions and gradually restored capacity. Today's environment presents miners with competing infrastructure priorities: artificial intelligence and high-performance computing systems now compete directly for capital allocation alongside Bitcoin mining hardware expansion.
The shift extends beyond hardware preferences. Nearly all publicly listed mining companies are reportedly reallocating resources away from pure Bitcoin mining operations toward AI infrastructure, according to Zagury's assessment. Whether this represents a temporary rebalancing of capital or a structural shift in how miners deploy resources remains unresolved.