The math has backfired on Bitcoin miners, and the war is making the situation worse every week.
Checkonchain’s difficulty regression model, which estimates average production costs based on network difficulty and energy inputs, pegged this figure at $88,000 per bitcoin as of March 13.
Bitcoin is trading at $69,200 as of Sunday morning, creating a gap of nearly $19,000 per coin and meaning the average miner is operating at a 21% loss on each block produced.
The cost squeeze has deepened since the October crash sent bitcoin from $126,000 to less than $70,000, but the war in Iran has accelerated it. Oil above $100 directly contributes to electricity costs for mining operations, particularly the estimated 8-10% of global hashrate operating in the supply-sensitive energy markets of the Middle East.
The Strait of Hormuz, which hosts around 20% of global oil and gas flows, remains effectively closed to most commercial traffic. And Trump’s 48-hour ultimatum on Saturday, threatening to attack Iranian power plants, added a new level of risk for miners.
The network is already showing stress. Difficulty fell 7.76% on Saturday to 133.79 trillion, the second-largest negative adjustment of 2026 after February’s 11.16% drop during Winter Storm Fern. The difficulty is now almost 10% lower than its level at the start of the year and well below the historic peak of November 2025, close to 155,000 billion.
The hashrate has retreated to around 920 EH/s, well below the all-time high of 1 zetahash reached in 2025. Average block times over the past epoch have stretched to 12 minutes and 36 seconds, well above the 10 minute target.
Hashprice, the metric that tracks miners’ expected revenue per unit of computing power, hovers around $33.30 per petahash per second per day according to the Luxor Hashrate Index. That’s close to break-even for most hardware and not far from the all-time low of $28 hit on February 23.
When miners cannot cover their costs, they sell bitcoins to fund their operations. This selloff adds supply pressure to a market already struggling with 43% of total supply at a loss, whales trading in rallies and leveraged positioning dominating price action. The mining economy is not just a sector story. It’s a story of market structure.
Publicly traded miners have adapted by diversifying into AI and high-performance computing, which offer more predictable revenue than mining bitcoin at a loss. Marathon Digital, Cipher Mining and others have been boosting their data center capacity alongside their mining operations.
The next difficulty adjustment is scheduled for early April and is expected to decrease further according to CoinWarz data. If bitcoin remains below $88,000 and there is no sign of a return to this level in the near term, the exodus of miners continues and difficulties continue to decline.
The network is self-correcting by design, making it less expensive to operate when participants leave. But it is between the point when costs exceed revenues and when hardship adjusts sufficiently to restore profitability that the damage occurs, both to miners and to the spot market that absorbs their forced sales.
