Bitcoin's mining difficulty has been cut for the second consecutive time in May 2026, with the latest adjustment of 2.3% on May 1st following a 2.43% decline in April. This marks the sixth difficulty reduction in 2026, with the cumulative 90-day trend at minus 4.29%. The network's computational power has trended lower, now resting below 1 ZH/s threshold after a brief rebound above that level. The core driver is a massive capital shift, not a technical failure, as mining companies are exiting Bitcoin for AI infrastructure.
Public mining companies sold a record 32,000 BTC in Q1 2026, more than they sold in all of 2025, with this capital flowing out of Bitcoin mining and into AI infrastructure. Marathon offloaded over 15,000 BTC in March, while Riot Platforms sold 3,778 BTC for $289.5 million. This exodus of hashrate is not being replaced at the same pace, creating a structural drag on network power. The Bitcoin Miner Position Index (MPI) has dropped to -1.2, indicating that miners are selling less than usual, with total Bitcoin holdings reaching approximately 1.8 million BTC as of April 19th, equivalent to about $140 billion in dollar terms.
Despite the structural decline in network power, surviving miners on efficient hardware are experiencing improved economics. Hashprice has risen to $37.52 per petahash per second, meaning miners on efficient hardware are earning more per unit of compute, even as total network hashrate shrinks. However, this creates a classic miner capitulation cycle, with block times now averaging 10 minutes and 28 seconds. The next difficulty adjustment, expected around May 17, will likely cut another 3.07%, creating a narrow window for efficient miners to capture high hashprice before the next adjustment. Market sentiment reflects deep skepticism about a near-term breakout, with expectations for a move toward $115,000 priced at near-zero.
