Arctic Blast Impact on Bitcoin Mining

In January, a powerful Arctic blast caused temperatures to plunge throughout the southern U.S., significantly affecting Bitcoin mining profitability due to rising energy prices. As a result, Bitcoin’s mining difficulty experienced its first downward adjustment since late September 2024, moving down on January 27, 2025.

Bitcoin’s mining difficulty adjusts biweekly based on miner performance, aiming to maintain an approximate ten-minute interval between blocks. A decrease in network hash power leads to easier block discovery as the mining difficulty lowers.

Previously, the mining difficulty had remained stable or increased for six consecutive months, with two exceptions: a dip on September 25, 2024, following an all-time high, and the recent decline in January 2025.

According to Luxor, the cold temperatures increased natural gas demand while reducing renewable energy efficiency, which raised electricity costs and complicated profitable Bitcoin mining for U.S. firms. Data from The Block indicated that miner revenue per terahash fell slightly in January relative to December, hinting at diminished mining profitability.

Luxor estimates that the U.S. accounts for a 36% share of the global Bitcoin mining hashrate, with Texas contributing 17%. Notably, firms like Riot Platforms, which manages the largest U.S. mining operation in Rockdale, Texas, are diversifying by reallocating some processing power to AI and high-performance computing tasks.

Luxor analysts anticipate that Bitcoin’s mining difficulty will follow its usual pattern as the extreme cold subsides, predicting that hashrate stability will improve as temperatures return to normal.