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Bitcoin Mining Pressure Grows While Institutional Buyers Accumulate BTC
Bitcoin Mining – A recent VanEck report suggests that the latest decline in Bitcoin mining activity could be setting the stage for a bullish turn, echoing patterns seen in past market cycles.
Hashrate Decline Revives a Contrarian Signal
In its Monday report titled “Mid-December 2025 ChainCheck,” VanEck analysts noted that Bitcoin has historically shown stronger forward returns following periods of declining network hashrate. Since 2014, 90-day forward BTC returns were positive 65% of the time when hashrate was falling, compared to 54% when hashrate was rising.
VanEck describes this pattern as a contrarian signal, often linked to miner capitulation—a phase where less efficient miners exit the network due to financial pressure. According to the report, Bitcoin’s hashrate fell 4% in the month through Dec. 15, marking the steepest drop since April 2024.
The analysts added that when hashrate compression persists over longer periods, positive forward returns tend to appear more frequently and with greater magnitude, reinforcing the long-term bullish implications.
Mining Profitability Under Pressure
The decline in hashrate comes as mining profitability deteriorates. VanEck data shows that the breakeven electricity cost for a mid-generation rig like the Antminer S19 XP dropped sharply—from around $0.12 per kWh in late 2024 to approximately $0.077 by mid-December 2025.
This metric represents the maximum electricity price miners can pay without operating at a loss. A falling breakeven cost typically signals that only low-cost operators can remain competitive, intensifying pressure across the mining sector.
Bitcoin Volatility and Institutional Accumulation
Bitcoin has remained volatile after sliding to around $81,000 on Nov. 21, down from its all-time high of $126,080 recorded a month earlier. At the time of reporting, BTC was trading near $87,907, down 1.09% over 24 hours.
Despite miner stress, institutional demand is absorbing supply. VanEck highlighted that digital asset treasuries (DATs) aggressively bought the dip, acquiring roughly 42,000 BTC from mid-November to mid-December—a 4% month-over-month increase. Total DAT holdings now stand near 1.09 million BTC, marking the largest accumulation since mid-2025.
Looking ahead, VanEck expects many DATs to shift away from common stock issuance, instead funding future Bitcoin purchases through preferred share sales, signaling an evolving institutional strategy around BTC exposure.
