Hashrate V-shaped rebound + Difficulty surges by 15% + Price halves = Miners either defect to AI or stubbornly hold on

On February 20, BTC mining difficulty surged by 14.73% to 144.4T - the largest single adjustment since China's mining ban in 2021.

Behind this number is a contradictory story.

Winter storm → Difficulty plummets → Hashrate V-shaped rebound. The winter storm in the U.S. forced miners to reduce operations, with difficulty temporarily lowered by 12%, and hashrate dropping to 826 EH/s. After the storm, miners rushed to come online, and hashrate rebounded to over 1 ZH/s. Difficulty then surged by 15%, completely offsetting the earlier decline.

But the economic calculations are completely off.

The cost to mine one BTC is approximately $84,000. The current price of BTC is $68,153. Each mined coin incurs a loss of $15,847. Hashprice has dropped to $23.9/PH/s, a multi-year low. For the vast majority of miners, this means operating at a loss.

Who is still mining? Two types of players:

Category 1: Middle Eastern miners with low electricity costs. UAE mining holds approximately $344 million in unrealized profits - they use nearly free energy, with costs far below the global average. For them, $68,000 is still profitable.

Category 2: Public mining companies defecting to AI. Bitfarms (BITF) announced a rebranding to "increase focus on AI infrastructure." Activist investor Starboard urges Riot Platforms (RIOT) to expand their AI data center business. These companies are not "mining" - they are using the shell of mining infrastructure to run AI computing businesses.

Trigger: If hashprice falls below $20/PH/s and BTC remains below $65,000 for over 2 weeks, medium-sized mining companies will be forced to sell BTC or shut down, creating a second wave of miner capitulation. Conversely, if BTC breaks through $71,693 (Glassnode key resistance level) and stabilizes, miner profit margins will turn positive, ending the selling pressure cycle.$BTC