In a significant analysis of the cryptocurrency mining sector, banking giant JPMorgan Chase & Co. has reported that the Bitcoin network's total computational power, or hashrate, declined for a second consecutive month through December 2025. This trend is interpreted as a clear signal that intense competition among miners is easing, driven primarily by a severe and sustained plunge in mining profitability.
The report highlights that daily block reward revenue per exahash fell to a record low in December, dropping 7% month-over-month and a stark 32% year-over-year. This profitability squeeze stems from lower transaction fee income, sustained high operational costs, and the lingering impact of the 2024 Bitcoin halving, which reduced the block reward. The environment is forcing high-cost mining operations to make difficult decisions, often involving the shutdown of inefficient hardware or the selling of Bitcoin reserves to cover expenses.
This hashrate compression points to mounting stress across the mining sector, particularly for operators with weaker balance sheets. JPMorgan characterizes this as a typical industry consolidation phase during periods of prolonged margin compression, where inefficient participants are shed from the network.
Interestingly, JPMorgan notes that such extended periods of hashrate compression and miner capitulation have historically acted as a bullish contrarian signal for Bitcoin's price. These phases tend to precede recoveries by clearing out inefficient supply and reducing forced selling, thereby improving the market's structural foundation.
This theory finds some support in current price action, as Bitcoin's price climbed to around $93,900—its highest level in four weeks—even as miner stress intensified. This divergence suggests broader market demand is currently outweighing near-term mining headwinds.
Furthermore, the report highlights a seeming contradiction: while core mining profitability metrics hit record lows, the stock prices of U.S.-listed Bitcoin mining companies saw robust gains, with their aggregate market capitalization surging approximately 73% last year. JPMorgan suggests this is because investors are evaluating these firms not just as Bitcoin producers, but as technology and infrastructure plays diversifying into areas like high-performance computing (HPC) and artificial intelligence (AI).
Looking ahead, JPMorgan argues that the balance sheet strength and long-term strategies of major listed mining companies will be more critical for Bitcoin's trajectory than short-term miner stress. The bank views the current hashrate decline as a sign of structural adjustment rather than systemic weakness, an adjustment that could ultimately prove supportive for the network if the consolidation phase continues.
