Bitcoin hashrate posted its first Q1 decline since 2020 as mining companies moved more of their power business toward AI.
Bitcoin‘s network hashrate ended Q1 2026 lower on a quarterly basis, marking its first quarterly decline since 2020, according to Keyrock’s May 4 research report. For years, Bitcoin’s hsharate kept climbing even through ugly markets, bankruptcies and the 2024 halving.
But now, Keyrock says Bitcoin mining difficulty has dropped 10.7% so far this year, falling from 148.3T at the start of 2026 to 132.47T after the latest adjustment. Six of the first nine difficulty adjustments of the year have been negative.
Read also: Bitcoin ETF Flows April 2026: Inflows Exceed $2B for the Month
The latest cut came on May 1 at block 947,520, when difficulty fell 2.3%. That followed another 2.4% drop on April 17, making it the second straight downward adjustment.
AI Is Pulling Power Away From Bitcoin
As Keyrock’s analysts explain, the weighted average production cost for listed miners is now around $80,000 to $90,000 per BTC▼$65,681.00. So even though Bitcoin has just reached about $80,000 again, it still puts weaker and higher-cost miners close to breakeven rather than comfortably back in profit.
And that squeeze is showing up in treasury moves. The analysts say public Bitcoin mining companies sold a record 32,000 BTC in Q1, which is more than they sold in all four quarters of 2025 combined.
A growing number of public Bitcoin miners are using their power sites for AI and high-performance computing. Keyrock said more than $70 billion in AI and HPC contracts have now been announced across the public mining sector. The firm added:
“What we are watching is a repricing of hashrate as a commodity. Miners are rationally reallocating energy infrastructure toward AI workloads that currently offer superior risk-adjusted returns.”
With the latest reorganization, Bitcoin hashrate remains far below its 2025 peak. The network hit an all-time high of 1.442 ZH/s in September 2025, but at the May 1 adjustment point, it briefly touched 899 EH/s, down 38% from that peak.
The next test comes around May 17, when Bitcoin is expected to adjust difficulty again.
Read more: Strategy Pauses Bitcoin Purchases for First Time Since Late March: What’s Behind the Halt?
