A severe winter storm that swept across the United States last week created a paradoxical market reaction: while it forced many Bitcoin mining operations to shut down, it simultaneously triggered a significant rally in mining company stocks and boosted profitability for miners that remained online.
On Wednesday, shares of major publicly traded Bitcoin mining firms posted double-digit gains. TeraWulf rose approximately 11%, Iren Limited gained 14%, and Cipher Mining climbed about 13%, according to data from financial markets platform Barchart. This performance came as the Bitcoin network’s total computing power, or hashrate, began a partial recovery from a historic plunge.
Network Hashrate Plunges to Seven-Month Low
The storm’s impact was first reflected in the Bitcoin network’s hashrate. Data from Coinwarz shows the metric sank to a seven-month low of 663 exahashes per second (EH/s) on Sunday, representing a staggering 40% drop from the previous week’s levels near 1.1 zettahashes per second (ZH/s). By Wednesday, the hashrate had recovered to 814 EH/s, though it remains well below pre-storm levels.
This sharp decline directly resulted from mining companies curtailing operations to comply with requests from grid operators and conserve energy during the extreme cold. Julio Moreno, head of research at CryptoQuant, detailed the production impact for several large miners in a Monday post on X. He noted that CleanSpark’s daily Bitcoin output fell from 22 BTC to 12 BTC, Riot Platforms’ dropped from 16 BTC to 3 BTC, Marathon Digital Holdings’ fell from 45 BTC to 7 BTC, and Iren’s decreased from 18 BTC to 6 BTC.
Bitcoin hashrate in EH/S, one-month chart. Source: Coinwarz
The Bitcoin mining ecosystem Braiins characterized the event as a stress test, stating on X that “Winter punishes poor preparation and rushed decisions.” The firm warned that most equipment damage occurs when machines are restarted in freezing temperatures or if facilities lack adequate airflow and temperature control systems.
Reduced Competition Boosts Miner Profitability
For the miners that stayed online, the dramatic reduction in network competition translated directly into improved economics. A lower hashrate means fewer miners are competing to solve the next block, increasing the probability that any given machine will successfully mine a block and earn the block reward and associated transaction fees.
This dynamic is precisely measured by the Bitcoin hashprice index, a key benchmark for miner revenue per unit of hashpower. According to data from HashrateIndex, the index rose to $0.040 per terahash per day on Wednesday, up from $0.038 per TH/s per day. This increase reflects higher daily revenue for each unit of mining capacity operating on the network.
Bitcoin hashprice index in USD, one-week chart. Source: Hashrateindex
The market reaction in mining equities underscores how temporary network disruptions can create a favorable, albeit short-lived, operating environment for well-capitalized and efficiently managed mining firms. These companies often have the flexibility to maintain partial operations or quickly resume mining after a grid emergency, capturing a larger share of block rewards during periods of reduced competition.
Bitcoin mining stock performance. Source: Barchart
While the hashrate recovery is underway, the episode serves as a stark reminder of the physical infrastructure risks inherent in Bitcoin mining, particularly for operations in regions susceptible to extreme weather. The divergence between the sharp production declines for major miners and the subsequent rise in their stock prices highlights the market’s focus on operational resilience and the immediate financial benefits derived from network congestion events.
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