Bitcoin Mining Difficulty Drops in 2026 Adjustment, But Profitability Remains Under Pressure

Bitcoin mining difficulty dropped to 146.4 trillion in the first adjustment of 2026, offering temporary relief to miners struggling with tight margins. The adjustment was triggered by average block times of 9.88 minutes, slightly faster than the 10-minute target, signaling the network's automatic difficulty adjustment mechanism. Analysts expect the next adjustment on January 22 to increase difficulty to around 148.2 trillion, as block times are projected to slow closer to the target.

Despite the dip in difficulty, the overall mining environment remains challenging. The Bitcoin mining sector entered 2026 with difficulty levels still near historical highs, having peaked at 155.9 trillion in November 2025. Miners are also grappling with the economic impact of the 2024 halving, which cut block rewards in half and sharply reduced profitability.

The drop in mining difficulty provides a small reprieve but does not address the broader financial strain on mining operations. Miner hash price, which reflects expected revenue per unit of computational power, has fallen below the break-even level of $35 per petahash per second per day. This has forced many miners to evaluate whether to continue operations or halt activity if the price does not rise above $40 according to recent analysis.

Why Did This Happen?

The first 2026 adjustment was primarily driven by the average block time of 9.88 minutes, which is faster than the protocol's 10-minute target. This temporary easing allowed the network to reduce the mining difficulty to 146.4 trillion. While the adjustment provides a brief respite, the protocol is designed to recalculate difficulty every 2016 blocks (approximately every two weeks) to maintain a stable block production rate. With the next adjustment expected on January 22, difficulty is forecast to rise to 148.2 trillion, aligning more closely with the 10-minute block time.

How Did Markets React?

Bitcoin's price currently trades at $90,809, but the mining sector is not seeing the benefits of a broader price rally. Miners continue to report lower revenues due to a combination of reduced block rewards and higher operational costs. The 2024 halving event significantly impacted profitability, and the recent crypto market downturn, including a 30% drop in BTC price during October and November 2025, has further pressured mining operations.

Despite these challenges, some mining firms are doubling down on U.S. expansion. Riot Platforms, for example, recently inked a long-term agreement with AMD to lease data center capacity, while Galaxy Digital is seeking to expand its Texas operations according to industry reports. These moves suggest that while the current environment remains difficult, some industry players are investing in long-term capacity and efficiency improvements.

What Are Analysts Watching Next?

The next difficulty adjustment on January 22 will be closely watched as a key indicator of miner activity and profitability. If block times slow to 10 minutes, difficulty could rise again, potentially signaling more aggressive competition among miners.

Analysts are also monitoring miner hash price as a critical survival metric. The recent drop below $35 per petahash per second has intensified scrutiny of which miners can maintain operations without additional cost-cutting or strategic shifts.

In addition to technical metrics, external factors such as U.S. tariffs and macroeconomic conditions are also being assessed for their impact on the mining industry. Tariff policies and concerns about supply chain disruptions could further complicate expansion and equipment sourcing for mining firms.

With the sector still reeling from the 2025 downturn and the April 2024 halving, Bitcoin mining remains in a period of strategic recalibration. While the recent difficulty dip offers a brief pause in the pressure, the broader challenges facing the industry suggest that profitability will remain a key battleground for the remainder of 2026.