Bitcoin Miners Power Back Above 1 Zettahash - But Profits Hover Near Historic Lows

Bitcoin miners have driven the network hashrate back above 1 zettahash, signaling increased computational power dedicated to the blockchain. This uptick, however, has not translated into improved profitability for miners, as industry observers note ongoing challenges in the sector.

Network hashrate increases typically reflect rising competition among miners to validate new blocks. However, in this case, the higher hashrate is accompanied by elevated mining difficulty and reduced onchain fees, which are squeezing miners' margins.

Bitcoin mining profitability fell for a fourth consecutive month in November, with JPMorgan noting a 26% drop in daily block reward gross profit. This decline coincided with a 1% drop in the network hashrate and a 16% drop in the combined market cap of U.S.-listed miners.

Why Is Profitability So Low?

Bitcoin mining profitability has remained near historic lows due to compressed mining revenue and rising difficulty. The hashrate is a proxy for mining competition and difficulty, with higher values meaning more miners are vying for the same block rewards.

Daily block reward revenue per exahash dropped to $41,400 in November, a 14% decline from October and 20% year-over-year. This decline reflects the industry's struggle to maintain profitability amid falling Bitcoin prices and higher operational costs.

Mining difficulty adjustments are automatic and designed to maintain a 10-minute block generation time. As more hashrate is added to the network, difficulty increases, making it harder for individual miners to claim block rewards.

How Are Companies Responding?

American Bitcoin, a firm co-founded by Donald Trump's sons, reported a $59.45 million Q4 loss in 2025. The loss was attributed to a non-cash Bitcoin revaluation and weaker crypto prices. Despite a 159% increase in 2025 revenue to $185.2 million, the firm's shares have fallen over 39% in 2026, outpacing Bitcoin's decline.

Intchains Group, meanwhile, is focusing on cost-saving initiatives and expanding its staking operations. The company launched its Goldshell Stake Proof-of-Stake platform in 2025 and plans to continue Ethereum accumulation and dual-platform ETH staking in 2026.

What Are Analysts Watching Next?

Bitcoin's hashrate is a key indicator of mining health, but it does not guarantee profitability. Analysts are closely monitoring the combined impact of rising difficulty and declining Bitcoin prices. JPMorgan has emphasized that the market cap of U.S.-listed miners remains under pressure as the industry navigates a challenging environment.

Regulatory developments are also in focus. Paul Atkins, the U.S. SEC Chair, will speak at Bitcoin 2026, marking the first time a sitting SEC Chair will address the event. His "Project Crypto" initiative aims to create a clear, innovation-friendly regulatory framework for digital assets.

Market participants are watching for potential catalysts in 2026, including Ethereum price action, Bitcoin's steadiness amid digital asset treasury trends, and major institutional moves. Reports like Morgan Stanley's application for a national trust bank in crypto highlight the growing institutional interest in digital assets.