Bitcoin mining difficulty is increasingly likely to record an annual net decline for the first time ever this year.

U.Today, a blockchain outlet, reported on July 27 that bitcoin mining difficulty has been trending down from 148.3 trillion at the end of last year to 126.2 trillion now.

The potential decline is drawing attention because it would be the first annual net drop since the bitcoin network launched. It is not yet a confirmed figure, with 5 automatic difficulty adjustments remaining until year-end. If bitcoin rebounds and mining equipment comes back online, difficulty at year-end could still exceed 2025 levels.

The strain on the mining industry stems from worsening profitability. Bitcoin is down 26 percent from the start of the year, and industry revenue has fallen to about half. OnchainMind estimates the current average mining cost per bitcoin at $76,100, while the market price is hovering around $65,000. That implies more miners are halting equipment as they move into loss territory.

Weather factors have added to the pressure. A massive hurricane in around February that hit the United States and summer heat in Texas have raised power cost burdens, and some companies halted operations of ASIC application-specific integrated circuit miners to avoid surging electricity bills. As a result, total network hashrate is about 20 percent below its historical peak.

At the network level, this adjustment is acting as an automatic defense mechanism. The bitcoin algorithm lowers difficulty to reduce competition intensity and has shown a structure that protects profitability for miners that secure relatively cheaper power.

On-chain indicators are also in focus. The Puell Multiple has fallen into a deep bottom zone at the 17th percentile. The indicator has been assessed as often coinciding with the final stage in which inefficient mining equipment is cleared from the market. That is why market participants view falling difficulty and miner capitulation as key price-bottom signals.

The divergence between mining stocks and the spot market is also notable. Traditional bitcoin mining is under loss pressure, but some mining-related stocks are rising on expectations of demand for artificial intelligence. It means miners' financial stability is shifting to depend more on computing power leased to large AI companies than on the bitcoin price.

The remaining variables are difficulty adjustments through year-end and whether bitcoin prices recover. If a rebound emerges within the year, the decline in difficulty could narrow or turn back to an increase. If the current trend continues, the bitcoin network will again show a structure that balances itself even as mining profitability worsens.

2026 is the first year ever in which bitcoin difficulty dropped. What do you think it means? pic.twitter.com/0czgWD0zu1