Bitcoin Hash Rate Falls by 34% Due to Freezing Temperatures in Texas

The Bitcoin hash rate experienced a 34% decline, likely influenced by the sudden freeze in Texas, leading some miners to scale back operations due to increased demand on the state’s energy grid. 

Starting on January 14, temperatures in various Texas regions fell below freezing for the first time since a major ice storm in February 2023. YCharts data revealed a drop in the total Bitcoin network hash rate from over 629 exahashes per second (EH/s) on January 11 to approximately 415 EH/s on January 15, representing a 34% decrease. The hash rate rebounded to over 454 EH/s on January 16 when temperatures in Austin briefly surpassed freezing during the day.

Texas, contributing about 29% of the Bitcoin hash rate in the United States according to Foundry’s data pool, attracted many mining firms relocating from China following the crackdown on BTC miners and crypto. Notable companies with operations in Texas include Marathon Digital, Riot Platforms, Bitdeer, and Core Scientific.

Unlike the challenges faced in 2021, when extreme winter weather caused widespread power outages and disruptions, there were fewer reports of significant issues with Texas’ power grid during this freeze. Many mining firms have joined a program organised by the Electric Reliability Council of Texas (ERCOT) that compensates them for adjusting their load on the state’s power grid during periods of high demand.

Charlie Schumacher, vice president of corporate communications at Marathon Digital, emphasised that Marathon, along with other Bitcoin miners, has been reducing operations to support the Texas electric grid and residents battling sub-zero temperatures. He went on to state: “This is precisely how the system should be working. Bitcoin miners serve as base load that turns off during extreme weather events, making energy more abundant and cheaper for those who need it within minutes.”

A representative from Riot also shared the company’s active participation in demand response programs, enabling ERCOT to manage Riot’s load during crucial moments for grid balance amid challenging weather conditions.

In the context of Texas, heightened demand is often linked to extreme heat in summers and harsh winter conditions, potentially posing a threat to the state’s energy infrastructure. In December 2022, Argo Blockchain reported a notable decrease in activity at its Texas Helios facility due to winter conditions, resulting in mining approximately 25% less Bitcoin than in November. As of January 17, ERCOT reported that “grid conditions are expected to be normal” starting at midnight local time.