Bitcoin is experiencing its first prolonged “hashrate bear market,” according to Twenty One Capital CEO Raphael Zagury, who said the network’s computing power remains well below the record levels reached in late 2025. Presentation materials filed with the U.S. Securities and Exchange Commission showed Bitcoin’s hashrate has declined roughly 22% to 24% from its peak.
Speaking at Bitcoin Asia in Hong Kong, Zagury argued that the current downturn differs from the sharp decline caused by China’s 2021 mining ban. Instead of relocating equipment to new regions, many mining companies are now directing capital and infrastructure toward artificial intelligence projects, creating competition for power, data centers, and investment.
He noted that AI has given miners an alternative use for their facilities, prompting several public mining companies to expand into high-performance computing and AI hosting while continuing to operate Bitcoin mining businesses.
Despite the decline in network hashrate, Zagury said efficient miners could benefit if competitors leave the market. Lower network computing power can lead to downward difficulty adjustments, allowing remaining miners to capture a larger share of block rewards without adding more machines.
He added that mining performance depends on factors including Bitcoin’s price, electricity costs, equipment efficiency, and network competition. According to Zagury, mining tends to perform best when Bitcoin’s price rises faster than hashrate growth.
Zagury also defended Bitcoin mining’s energy consumption, arguing that mining operations can quickly reduce or increase power usage depending on grid conditions, making them more flexible than many other industrial energy users.
