Bitcoin's Shutdown Price in Volatile Markets
- Core Viewpoint: The market should not view the "miner shutdown price," which is based on average assumptions, as a unified industry lifeline. The cost structure of the Bitcoin mining industry is highly differentiated and possesses self-regulating capabilities. Price pressures often trigger structural adjustments rather than systemic risks, driving overall efficiency improvements in the industry.
- Key Elements:
- The "shutdown price" is a theoretical model based on assumptions such as uniform electricity costs and equipment efficiency. In reality, there are significant differences in miner energy efficiency (e.g., ranging from 9.5 J/T to 12.8 J/T) and electricity costs (e.g., from $0.03 to $0.12 per kWh), meaning there is no unified price threshold.
- When facing price pressure, industry adjustments first manifest as the exit of marginal hash rate with high costs and low efficiency. This leads to a phased decline in the total network hash rate, representing a natural industry shakeout rather than a compromise to network security.
- The Bitcoin network has a self-adjusting mechanism. After some hash rate exits, the mining difficulty decreases, increasing the profit margin for the remaining efficient hash rate and pushing the network toward a new equilibrium. This is key to its resilience through multiple cycles.
- Historical cycles (e.g., 2019, 2022) show that after prices fell below some production costs, the industry converged toward a new equilibrium through hash rate adjustments and difficulty changes, driving evolution toward lower costs and higher efficiency.
- The key for companies to cope with volatility lies in long-term operational resilience. This can be achieved by deploying high-efficiency miners, optimizing energy cost structures, and scaling operations to build a cost moat and maintain stable operations.
Recently, Bitcoin's price has experienced a correction, while assets like gold and silver have also shown significant volatility. Macroeconomic uncertainty has noticeably increased, putting overall pressure on risk assets. Against this backdrop, market sentiment has turned cautious, and discussions surrounding crypto assets are gradually shifting from growth expectations to viability. Within this context, the operational status of miners has become a focal point, with the concept of the "miner shutdown price" being frequently mentioned.
This concern is not unfounded. Under the dual pressures of price declines and tightening macro liquidity, the profitability of the mining industry indeed faces periodic pressure. The market attempts to use the "shutdown price" metric to gauge whether miners will be forced into a large-scale exit, thereby impacting network security and asset prospects. This attention itself reflects market participation. However, if this concept alone is used as the core basis for judging industry risk, it often overlooks the key differences and self-regulating characteristics within Bitcoin's mining operational mechanisms. In reality, in actual operations, the "shutdown price" is not a simple, uniform price warning line.
The Shutdown Price is Often Misunderstood
From an industry perspective, there is no single "miner shutdown price" applicable to all miners. The so-called "shutdown price" is more of a theoretical result derived from model calculations under specific assumed conditions, typically assuming uniform electricity costs, equipment efficiency, and operational cost structures. However, in reality, the cost structure of the mining industry is highly fragmented. Different miner models exhibit significant differences in energy efficiency performance; the cost per unit of hashrate between new-generation efficient miners and older equipment is not comparable. For example, among current mainstream models, the Antminer S23 Hyd (approx. 580 TH/s, 5510W) has an efficiency of about 9.5 J/T, the Antminer S21 (approx. 480 TH/s, 5280W) is about 11 J/T, and the Canaan Avalon A16XP-300T is about 12.8 J/T. Every 1–2 J/T improvement in unit efficiency significantly alters the breakeven range under the same electricity price conditions.
Source: Cambridge Bitcoin Electricity Consumption Index (CBECI), Cambridge Centre for Alternative Finance (CCAF), accessed on February 12, 2026
There are also significant differences in the energy environments and contracted electricity prices of different mining farms. From hydropower and wind power to thermal power, different energy mixes directly determine marginal cost levels. Large mining farms in regions abundant with hydropower resources in North America can secure long-term contracted electricity prices as low as $0.03–0.05/kWh, while commercial electricity prices in some regions with higher energy costs can reach $0.08–0.12/kWh. Consequently, the operational pressure on the same miner model varies significantly under different electricity price environments. Furthermore, differences in miners' operational efficiency, management costs, capital structure, and risk management strategies also affect their ability to withstand price fluctuations.
Precisely because of the significant variations in miner models, electricity price structures, and operational efficiency, there is no uniform "miner shutdown price" in the industry; the actual situation varies depending on mining farm conditions and equipment configuration. Treating a model result based on average assumptions as the industry's "survival line" inherently tends to amplify market sentiment.
When Bitcoin's price gradually approaches certain cost ranges amid volatility, the real changes occurring in the industry often resemble a round of structural adjustment rather than a concentrated outbreak of systemic risk. During phases of price pressure and relatively high mining difficulty, the overall profit margin for the industry narrows. Adjustments first appear in marginal hashrate with higher costs and lower efficiency. Some smaller-scale miners, those with higher energy costs, or those using aging equipment may choose to gradually shut down equipment, reduce hashrate, or adjust their asset structure to alleviate operational pressure.
This process is often reflected in macro data as a periodic decline in the network's total hashrate. A drop in hashrate does not mean network security is compromised; it more reflects the natural clearing and renewal within the industry. In fact, such cyclical changes typically accelerate the concentration of hashrate towards entities with scale operational capabilities and cost advantages, thereby improving the overall operational efficiency of the industry.
Market Screening and Self-Adaptation
Looking deeper, the "shutdown price" is not an absolute price floor but more like a reference range within a dynamic adjustment process. During market volatility, miners with high costs and low efficiency may choose to temporarily shut down equipment or adjust their operational strategies. Meanwhile, the Bitcoin network itself possesses mature self-adaptive mechanisms. When some hashrate exits, the network's mining difficulty adjusts downward accordingly. The remaining efficient hashrate still in operation gains a larger share of rewards, gradually pushing the network towards a new equilibrium. It is precisely this self-regulating capability that allows the Bitcoin mining ecosystem to continue operating through multiple cycles, also bringing improved output per unit of hashrate and a better operational environment for the efficient miners that persist.
Extending the timeline makes this pattern clearer. In past cycles, the industry has experienced phases where the price fell below the production cost range for some miners. During periods like 2019 and 2022, Bitcoin's price also fell below the production cost range for most miners at the time. However, following adjustments in hashrate, changes in difficulty, and market recovery, it gradually converged towards a new equilibrium range. Each cyclical adjustment pushes the industry towards lower energy costs, higher hashrate efficiency, and a more professional, scaled direction. Clearing out outdated capacity is itself a significant marker of industry maturity.
How to Move Forward Amid Volatility
Returning to the enterprise level, the key to navigating industry volatility lies not in short-term price predictions but in long-term preparation and operational resilience. Taking BitFuFu as an example, the company has long focused on mining infrastructure construction and operational efficiency optimization, continuously deploying new-generation high-efficiency miners. Through scaled operations and refined energy cost management, it consistently improves overall hashrate quality. The company has also deployed diversified energy partnerships, building a competitive electricity cost structure. Benefiting from comprehensive advantages in equipment efficiency, energy mix, and operational systems, its current hashrate remains stable, enabling the company to maintain relatively stable output performance and a healthy asset structure during industry adjustment phases.
Short-term market volatility is inevitable. However, what the Bitcoin network and mining industry have demonstrated through successive cycles is a powerful self-adaptive capacity and a continuous forward-evolving force. Behind the discussion of the "shutdown price," what truly deserves attention is how the industry completes efficiency leaps amid volatility, and those enterprises that remain focused on long-term development, continuously building moats of cost and efficiency.
Winter screens for vitality; cycles temper true value. The industry is experiencing not an exit, but a deeper consolidation and upgrade. We remain here, focused and steady, advancing alongside the network.
