Key takeaways
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- A severe winter storm is pushing power prices higher, forcing US Bitcoin miners to curtail or shut down operations
- Network hash rate dropped sharply, led by steep declines in US-heavy mining pools FoundryUSA and Luxor
- Miners with demand-response programs (notably in Texas) can monetize curtailment by selling power back to the grid; others must simply halt machines
- Public miners’ shares fell (Riot and MARA), highlighting earnings sensitivity to power-cost spikes and operational interruptions
What Happened?
An arctic blast and widespread winter storm increased electricity costs and stressed US power grids, prompting large-scale Bitcoin miners to reduce activity. As a result, Bitcoin’s hash rate declined sharply, driven mainly by reduced output from FoundryUSA and Luxor mining pools that are concentrated in US operators. Companies with the ability to participate in grid demand-response programs curtailed more strategically, while miners without those arrangements were forced into shutdowns due to uneconomic power rates.
Why It Matters?
For investors, this underscores how exposed US-based miners are to weather-driven power volatility—especially in states like Texas and Georgia where large-scale mining capacity sits on constrained grids. Curtailment can be a defensive move that protects margins, but it also reduces near-term production and revenue visibility, contributing to equity drawdowns in listed miners. At the network level, reduced US hash rate temporarily shifts block-winning odds toward non-US miners, effectively redistributing mining economics internationally during disruption windows. More broadly, the episode reinforces a growing constraint for both crypto mining and AI data centers: power and grid capacity are becoming a bottleneck, raising policy and community scrutiny around energy use.
What’s Next?
Watch for how long sub-zero temperatures persist and whether grid stress escalates into broader outages or emergency pricing that extends curtailments. Monitor hash-rate recovery as conditions normalize, since a rebound would signal miners returning to full production. For listed miners, the key swing factors will be realized power pricing, the scale of demand-response credits (where applicable), and any updated guidance on operating uptime and cost per coin during the storm period.
