Key Takeaways
Iran's Bitcoin hashrate plunged 77% over the last quarter amid escalating regional conflict, while the global network faces a separate crisis of profitability that has pushed average mining costs well above the price of Bitcoin.
"The impact was contained to Iran; neighboring UAE and Oman remained stable. Regional disruptions redistribute hashrate rather than destroy it," Ian Philpot, marketing director at Luxor Technology, said in the Q2 2026 Hashrate Index report that detailed the findings.
The conflict cut Iran's contribution from an estimated 9 exahashes per second (EH/s) to just 2 EH/s. Separately, the global 30-day average hashrate fell 5.8% quarter-over-quarter to 1,004 EH/s. Philpot attributes this broader decline not to the war but to a slump in Bitcoin prices that has crushed mining margins and forced older hardware offline. The Hashrate Index estimates 252 EH/s of such marginal capacity is currently sitting idle.
With the cost to produce one Bitcoin soaring to between $80,000 and $90,000, according to recent reports from CoinShares and Checkonchain, many miners are operating at a significant loss against a market price below $70,000. This economic pressure is forcing a wave of shutdowns and a strategic pivot toward more stable revenue streams like artificial intelligence.
The unprofitability of Bitcoin mining was reflected in the network's own mechanics. In late March, Bitcoin's mining difficulty saw a significant downward adjustment of 7.76%, the second-largest drop of 2026, as reported by CloverPool data. This adjustment is a direct consequence of hashrate leaving the network, confirming that a substantial number of machines were powered down.
Data from Glassnode cited by CoinDesk further revealed the network’s total hashrate posted its first Q1 year-over-year decline in six years, falling by approximately 4%. This downturn marks a significant reversal from the double-digit growth seen in the first quarter of the previous five years, underscoring the severity of the current profitability squeeze.
In response to the brutal economics, a growing number of publicly traded mining companies are accelerating their transition into AI and high-performance computing (HPC) providers. This strategic shift aims to leverage their existing data center infrastructure and power agreements for more predictable revenue.
Core Scientific (CORZ) recently secured a $500 million credit facility from Morgan Stanley to fund its expansion into HPC hosting. Similarly, Canadian firm HIVE Digital Technologies is phasing down its Bitcoin mining in Sweden to expand its AI data center capacity in Canada. The trend is widespread, with companies like Riot Platforms, IREN, and Cango all announcing major investments and operational shifts toward AI, signaling a potential long-term realignment of the digital infrastructure landscape.
This article is for informational purposes only and does not constitute investment advice.
