TLDR:
- Bitcoin hashrate peaked near 1.3 zettahashes late last year before a prolonged decline began.
- This marks the network’s longest stretch from an all-time hashrate high to full recovery.
- Nearly all public mining firms are shifting capacity from Bitcoin mining toward AI and HPC.
- Zagury says mining’s flexibility lets it stabilize power grids while pursuing new revenue.
Twenty One Capital CEO Rapha Zagury said Bitcoin is now experiencing its first-ever hashrate bear market, marking a shift unlike anything the network has faced before.
Speaking at Bitcoin Asia 2026 in Hong Kong, Zagury said nearly all publicly listed mining companies are exiting large-scale Bitcoin mining in favor of artificial intelligence and high-performance computing infrastructure.
Hashrate Decline Marks Longest Recovery Cycle On Record
Zagury delivered his keynote, titled “Here Be Dragons,” on August 28 at the Nakamoto Stage. He opened by referencing old navigational maps that labeled unexplored regions as uncharted territory, drawing a parallel to Bitcoin’s current phase.
He said the network hashrate reached close to 1.3 zettahashes late last year before beginning a steady decline that has continued since.
According to Zagury, this marks the longest stretch the network has recorded between an all-time high in hashrate and a full recovery.
Zagury distinguished this cycle from the hashrate drop following China’s 2021 mining ban. In that case, he said, machines were relocated to other regions, and the network rebounded within a relatively short period.
The present situation carries different dynamics, he said, largely because miners now have infrastructure alternatives that did not previously exist. AI and HPC workloads offer operators new ways to deploy computing capacity beyond Bitcoin mining alone.
Zagury said this shift explains why nearly every publicly traded mining company is moving away from pure Bitcoin mining at scale, choosing instead to diversify into AI-related infrastructure.
Zagury Defends Mining Economics And Energy Use
Zagury addressed two recurring criticisms of Bitcoin mining directly, arguing it is neither inherently a poor business nor a wasteful use of energy. He said commodity businesses succeed or fail based on their position on the cost curve, not the commodity itself.
He described Bitcoin as uniquely resistant to oversupply because of its difficulty adjustment, which keeps block production near ten minutes regardless of how much hashrate joins the network. This differs from commodities like oil, where higher prices typically draw in more supply.
Comparing two hypothetical miners with different energy costs and equipment efficiency, Zagury said capital structure and cost management determine profitability more than Bitcoin’s price movements. He said many mining failures in the past stemmed from weak cost positioning rather than market conditions.
On energy use, Zagury referenced a project in the Brazilian Amazon town of Manicoré, where the absence of electricity limited access to medicine and refrigeration.
Reflecting on that experience, he told the audience, “Energy is the substrate of everything that we call development.”
He also noted that mining is one of the most flexible industrial loads available, since machines can be powered on or off instantly.
Zagury said this flexibility positions miners to support grid stability while exploring AI and HPC opportunities, benefits he believes remain underpriced in how mining companies are currently valued.
