Bitcoin’s 180-Day Returns Defy Logic: Higher When Hashing Power Drops, Lower When It Rises
Here's a market anomaly that'll make traditional finance quants scratch their heads—and crypto veterans nod knowingly.
The Counterintuitive Correlation
Forget the textbook wisdom that says network strength directly fuels price. Fresh analysis reveals Bitcoin's average 180-day returns actually outperformed during periods of declining hashing power compared to when it was on the rise. The data cuts against the grain of conventional asset valuation, suggesting Bitcoin's market mechanics play by a different set of rules.
Decoding the Signal in the Noise
This inverse relationship hints at a more complex narrative. A drop in hash rate often signals miner capitulation—a shake-out of weaker operations during tough times. Historically, these phases have set the stage for supply squeezes and powerful rebounds, rewarding those who see turmoil as opportunity rather than threat. It's a brutal, self-correcting cycle that would give a traditional fund manager heart palpitations.
Why This Isn't Your Grandpa's Asset Class
The finding underscores crypto's core differentiator: its resilience is born from volatility, not in spite of it. While Wall Street frets over stability, Bitcoin's network uses economic pressure to shed inefficiency and emerge leaner. It's a feature, not a bug—though explaining that to a regulator over a three-martini lunch is another story.
So, the next time you see hash rate dip, remember: in the world of Bitcoin, sometimes the best time to plant a tree was during a drought. The market's memory is long, and its rewards often go to those who understand its pain.
Bitcoin’s average 180-day returns were better when hashing power declined than when it rose
The investment management firm presented several examples in its report on Monday that illustrate how hashrate declines tend to benefit long-term holders of Bitcoin. It noted that BTC has delivered positive 90-day returns about 65% of the time following a 30-day drop in hashrate since 2014, versus 54% following hashrate increases.
Moreover, for the same timeframe, when 90-day hashrate growth turned negative, Bitcoin posted positive six-month returns 77% of the time, averaging gains of about 72%. In times of hashrate increases, BTC still posted positive six-month returns around 61% of the time, though gains only averaged about 48%.
Overall, the average six-month returns for bitcoin have been about 30 basis points higher during periods of falling hashrate than during periods of rising hashrate. The data also suggests that a negative 90-day hashrate growth has been a materially better entry point for six-month returns, adding around 2,400 basis points.
As of now, Bitcoin’s network hashing power (on a 30-day moving average) has declined roughly 4% over the last month, the biggest drop since April 2024. The mining slowdown has been compounded by news from China’s Xinjiang region, where 1.3 GW of capacity has been shut down following inspections by government officials.
Jack Kong, the former head of Canaan, confirmed that China’s mining activities lost approximately 400,000 machines, resulting in a decrease in hashpower of about 100 exahashes per second in just a single day. That comes a month after China was disclosed as the third globally in mining activity, supplying about 14% of the network’s hashrate.
Nonetheless, many countries remain involved in the BTC mining industry, with estimates suggesting up to 13 are actively supporting it, including Russia, France, Bhutan, Iran, El Salvador, the UAE, Oman, Ethiopia, Argentina, Kenya, and, more recently, Japan.
Bitcoin’s price tumbled 9% in the last 30 days
The last 30 days have seen the price of Bitcoin plummet 9%. In the past 30 days, the price of Bitcoin has declined by 9%, while 30-day volatility has climbed above 45%, a level not seen since April 2025. Bitcoin hit its lowest on November 22, trading at around $80,700 — bringing the 30-day RSI to around 32. Discontinuous speculative demand left perpetual future basis rates at 5% annualized, dipping as low as 3.7%, compared to the annual average of 7.4%.
On-chain data for Bitcoin presents another gloomy image: the hash rate fell 1% month-over-month, daily fees decreased by 14%, and the number of active addresses was down 1%. On the upbeat side, over the last 30 days, Bitcoin DATs increased purchases, accumulating 42k BTC (+4% m/m) from mid-November to mid-December, totaling 1.09 million BTC. That’s the largest purchase since mid-July to mid-August 2025, when DATs totaled 128.1k BTC.
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