VanEck links AI power shift to potential Bitcoin price bottom

Key Takeaways

• VanEck reports the sharpest Bitcoin hashrate drop since April 2024.
• Miners are reallocating power from Bitcoin mining to AI data centers.
• Similar miner capitulation has previously marked short-term market bottoms.

CHINA (EtherX)  VanEck said a sharp fall in Bitcoin hashrate shows miners diverting power to AI data centers, a development that has historically signaled a near-term bottom in the cryptocurrency market.

The asset manager said Bitcoin’s hashrate has dropped about 4%, the steepest decline since April 2024, following recent price weakness and rising competition for electricity from artificial intelligence operators.

Context

In a report released on Tuesday, VanEck said miners are increasingly reallocating computing resources as revenues from AI-related workloads exceed near-term returns from Bitcoin mining.

The report said this shift has accelerated as mining margins tighten, forcing operators to seek alternative uses for existing infrastructure.

VanEck described the move as a form of miner capitulation, a phase when less efficient or higher-cost miners scale back operations or redirect capacity.

Market Signals

According to the report, similar hashrate contractions in past cycles were followed by significant Bitcoin price recoveries, with gains of roughly 65% recorded within 90 days.

“Miner capitulation has often coincided with exhaustion in selling pressure,” the report said, noting that the current drawdown stands out for its speed rather than its scale.

Bitcoin prices have faced pressure in recent sessions, with traders monitoring on-chain indicators for signs that forced selling by miners may be easing.

Hashrate, a measure of the total computing power securing the Bitcoin network, is closely watched because declines can signal miners shutting down equipment or shifting energy to other uses.

Industry Shift

VanEck said the growing demand for AI computing has created competition for power and data center capacity, particularly in regions with access to large-scale electricity supplies.

The report said some mining firms are able to generate steadier cash flows by leasing infrastructure or redirecting energy to AI applications, reducing their reliance on Bitcoin rewards.

This dynamic has contributed to the near-term reduction in network computing power, though the firm said such transitions have typically been temporary.

A spokesperson for VanEck declined to comment beyond the contents of the report.

Why It Matters Now

The hashrate decline comes at a time when investors are debating whether Bitcoin has found a floor after recent volatility.

VanEck said miner behavior often lags price moves, making capitulation signals relevant for assessing whether downside momentum is nearing exhaustion.

The firm cautioned that while historical patterns are notable, broader market conditions and macro factors will continue to influence price direction.

Market Reaction:

Traders are expected to track whether Bitcoin’s hashrate stabilizes or continues to fall, while watching price action for confirmation that selling pressure is fading. Analysts said the next few weeks will be critical in determining whether miner capitulation is ending and setting the stage for a short-term rebound.