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In December 2025, VanEck’s Bitcoin ChainCheck reported a 4% decrease in Bitcoin’s network hash rate, marking a significant downturn as the year drew to a close. This decline coincided with Bitcoin experiencing its weakest fourth quarter since 2018, an event VanEck interprets not as a prelude to prolonged weakness but as a potential harbinger of stronger long-term returns. The firm suggests that such hash rate dips have historically preceded positive market movements, indicating possible future gains for investors.
Market Dynamics and Miner Challenges
Throughout December, Bitcoin’s price faced significant pressure, falling approximately 9% and hovering around $87,000, dipping from a late November level of near $81,000. VanEck noted this period was characterized by increased volatility, reaching levels above 45%—the highest since April—and a noticeable decline in speculative interest. This was further evidenced by a drop in perpetual futures funding to about 5% annualized, significantly below its annual average, indicating a reduction in market leverage.
Amid this turmoil, VanEck identified miner stress as a critical factor. The firm noted that the network’s hash rate, on a 30-day moving average, experienced its steepest decline since April 2024. This strain on miners is attributed to falling Bitcoin prices and increased competition, with profitability being squeezed as breakeven electricity costs for older mining equipment, like the S19 XP miners, decreased to around $0.08 per kWh from $0.12 a year prior. Notably, shutdowns in China’s Xinjiang region, as authorities redirected power towards AI data centers, may have contributed to nearly 10% of global hash power being temporarily sidelined.
Investor Behavior and Market Outlook
The market demonstrated contrasting behaviors, with Bitcoin ETP holdings decreasing by 120 basis points monthly, while corporate digital asset treasuries saw a significant increase, acquiring approximately 42,000 BTC—marking their largest accumulation since July. This acquisition was primarily driven by strategic purchases, capitalizing on equity issuance capabilities, while other investors remained cautious.
Despite the price struggles, VanEck maintains a positive view for the long-term. On-chain data shows a divergence where medium-term holders, particularly those holding Bitcoin that last moved between one to five years ago, are reducing their exposure. In contrast, the oldest holding cohorts have largely maintained their positions. VanEck refers to this as a “diamond hands divergence,” highlighting that short-term traders are exiting while long-term holders continue to retain their investments.
Historically, periods of declining hash rates have benefited patient investors. VanEck’s analysis indicates that when 90-day hash rate growth becomes negative, Bitcoin’s 180-day forward returns have been positive 77% of the time, averaging gains of approximately 72%. The report suggests that buying Bitcoin during these downturns has historically improved forward returns by 2,400 basis points.
Challenging Market Conditions and Future Prospects
Despite the challenging conditions, with Bitcoin’s price down about 22% over the past three months, marking its worst fourth quarter since 2018, some analysts, like Sykodelic, argue that the current downturn represents a structural cooling phase rather than a disruption in the overall long-term trend of Bitcoin.
VanEck’s analysis offers a cautiously optimistic outlook for traders, suggesting that while current on-chain activity and miner pressures may dampen sentiment, improving liquidity conditions and reduced leverage could lay the groundwork for a more robust market cycle. The firm anticipates that these conditions might set the stage for potential recovery in 2026, framing the current challenges as an opportunity for future gains.
