- Massive production cuts by US Bitcoin miners due to weather.
- Hashrate dropped by up to 40% in two days.
- Miners with utility deals profited amid curtailed operations.
A severe winter storm in the US prompted Bitcoin miners to cut production, causing the network hashrate to fall by 40% within two days.
The event shows grid vulnerability, impacts miner profitability, and influences Bitcoin’s competitive landscape, affecting stock momentum for companies like Iren and TeraWulf.
A severe US winter storm, named “Fernan,” prompted Bitcoin miners to reduce production, leading to a significant drop in the network hashrate. A peak-to-low shift from 1.16 ZH/s to 663 EH/s was observed.
Major operators like CleanSpark and Marathon Digital were forced to curtail production. The daily Bitcoin output for companies declined dramatically, with Marathon dropping from 45 BTC to 7 BTC.
The abrupt weather changes led to over a million power outages, severely impacting regions where these mining companies operate. Electricity grids strained under demand, compelling miners to sell power back, boosting their margins significantly.
Financial effects included robust profit margins for miners who had pre-established utility agreements. They received premium rates for selling electricity, benefiting from the discrepancy in grid and mining energy costs. Scott Norris, Chief Mining Officer, Omnes, remarked: “The grid may ask for that energy and the mining may turn off, but that means the grid is paying more for the energy than the miner is making by mining Bitcoin.” Source.
The incident marked Bitcoin’s largest hashrate drop due to weather, emphasizing the vulnerability of non-adaptive operations. Miners with strategic partnerships emerged stronger amid widespread disruptions.
Historically, weather-induced power curtailments have led to temporary network security concerns. Long-term implications might steer regulatory focus on energy contracts or encourage sustainable mining practices.
