Iran Bitcoin mining collapse: infrastructure strikes and the conflict discount on hashrate

Iran’s Bitcoin mining hashrate fell by approximately 77% over the past quarter, dropping from roughly 9 exahashes per second (EH/s) to about 2 EH/s, according to a Hashrate Index report published Monday by Ian Philpot, marketing director at Luxor Technology.

The decline followed U.S. and Israeli military strikes that disrupted power infrastructure and forced an estimated 427,000 active mining machines offline.

Cause and development

Philpot said strikes beginning in February targeted Iranian infrastructure broadly, cutting reliable grid access to industrial mining facilities that had operated under government license since Iran legalized Bitcoin mining in 2019.

He added that Iran’s mining sector had been built around incentives tied to a sanctioned-economy model, including subsidized hydroelectric power and a mechanism to monetize energy exports that bypassed dollar-denominated settlement. That cost advantage weakened as grid stability became uncertain.

Philpot noted that while the conflict’s impact was contained within Iran, there was a spillover risk to neighboring UAE and Oman due to regional energy interdependencies. He said that risk did not materialize: “The impact was contained to Iran; neighboring UAE and Oman remained stable.”

Data and scale of the move

The loss is equivalent to roughly 7 EH/s quarter-over-quarter and represents the most severe regional hashrate contraction since China’s 2021 mining ban.

Despite the regional drop, global hashrate held near 1,000 EH/s throughout the disruption, reflecting Bitcoin’s decentralized proof-of-work design. Philpot said the 7 EH/s lost from Iran is less than 0.7% of the network’s pre-conflict capacity, helping explain why global metrics did not show measurable security degradation.

He characterized the effect as geographic redistribution rather than destruction of capacity, stating that “Regional disruptions redistribute hashrate rather than destroy it.”

Network mechanics and difficulty adjustment

Bitcoin’s difficulty adjusts every 2,016 blocks—about every two weeks—to maintain a ten-minute average block time. Philpot said the Iran-related loss, while meaningful regionally, is statistically modest against a global baseline of around 1,000 EH/s.

He said the difficulty adjustment would absorb the volume in a single recalibration cycle without material impact to block interval or transaction finality.

Broader hashrate trend and market drivers

Philpot pointed to a more consequential difficulty-related signal outside Iran: the 30-day simple moving average of global hashrate declined from 1,066 EH/s in Q1 to approximately 1,004 EH/s in Q2, a 5.8% quarter-over-quarter drop.

He attributed that decline primarily to Bitcoin’s price collapse rather than geopolitical disruption.

CoinGecko data cited in the report shows Bitcoin fell more than 45% from its all-time high of $126,000 set in October. Philpot said that move pushed “hash prices” to record lows and forced an estimated 252 EH/s of older, less efficient ASICs offline globally.

He compared the situation to the post-2021 China mining ban, noting that China’s exit removed an estimated 50–70% of global hashrate in weeks and triggered multiple consecutive negative difficulty adjustments before capacity migrated to the U.S. and Kazakhstan. In contrast, he said Iran’s loss is an order of magnitude smaller and did not produce a similar cascade.

Impact and outlook

A two-week ceasefire between the U.S. and Iran was reached Tuesday, though Philpot said the durability of the arrangement and any infrastructure restoration timeline remain unclear.

Overall, he said the Iran disruption appears to be a regional footnote within a globally price-driven contraction, adding that the Q2 difficulty softness is likely “predominantly a profitability story—miners voluntarily curtailing marginal machines—rather than a conflict story.”