In June, Bitcoin experienced a sudden and steep decline in its network strength — a phenomenon now referred to as the Bitcoin hash rate drop. Over the course of 10 days, Bitcoin’s hash rate plunged by over 15%, marking the biggest and fastest drop in approximately three years.
This unexpected shift set off alarms in the crypto community, leading many to speculate on possible causes. Initial reactions pointed toward Iran, but the full story is more complex.
What Is Bitcoin’s Hash Rate and Why Does It Matter?
Bitcoin’s hash rate represents the total computing power dedicated to mining and maintaining the blockchain. A high hash rate means a more secure and resilient network. When that number sharply declines, it not only raises concerns about security but also signals potential disruptions within the mining ecosystem.
Historically, major hash rate drops have corresponded with significant global events. In 2021, China’s sweeping ban on crypto mining slashed Bitcoin’s hash rate by over 50%, triggering a period of volatility and uncertainty. Eventually, the network bounced back—but not without a global reshuffling of mining power.
June 2025: The Perfect Storm
In June, a sharp decline in hash rate took the crypto world by surprise. Many immediately pointed fingers at Iran, especially after Israeli and U.S. military strikes reportedly damaged key infrastructure. These strikes were followed by internet shutdowns and nationwide power outages, conditions that would certainly knock miners offline.
Blockchain data backs up this theory to some extent. On June 20th, Iran’s government shut down much of its internet, coinciding with a 2.2% drop in the global hash rate. Just days later, more outages coincided with another 1% drop.
However, that only explains around 3.2% of the total decline. In fact, Bitcoin’s hash rate had already dropped over 6% between June 15th and 20th, before the Iranian blackouts. So what else happened?
The Hidden Culprit: U.S. Heatwave
While Iran contributed to the disruption, the United States—home to over 40% of global Bitcoin mining—was at the heart of the decline.
In mid-June, a brutal heatwave swept across the U.S., driving up electricity demand as millions of Americans cranked up their air conditioning. For crypto miners, whose operations require immense cooling and power, this was a nightmare scenario.
Rising power prices made mining less profitable. Many U.S. miners have contracts that allow them to sell electricity back to the grid during peak demand, making it more lucrative to shut down operations. As a result, numerous mining farms powered down voluntarily, contributing significantly to the hash rate crash.
Iran: A Crypto Powerhouse in the Shadows
Iran’s role in global Bitcoin mining is both strategic and controversial. Since 2018, when U.S. sanctions cut Iran off from global banking systems, the country turned to Bitcoin as a workaround. With electricity costs as low as 1–2 cents per kilowatt hour, Iran has been able to mine Bitcoin cheaply and convert it into a currency usable in global trade.
In 2019, Iran formally legalized crypto mining and created a licensing framework. However, it came with strings attached: licensed miners had to sell all mined BTC to the central bank, often at steep discounts.
Despite regulation, up to 85% of mining in Iran is estimated to be unlicensed, operating in a vast gray market. Mining rigs have been found in mosques, abandoned factories, and even government buildings. Much of this shadow operation is believed to be run by Iran’s Islamic Revolutionary Guard Corps (IRGC)—a powerful military and economic institution under direct control of the Supreme Leader.
By 2023, state-affiliated groups controlled an estimated 100,000 of the 180,000 mining devices operating in Iran. The country’s fragile power grid has struggled to keep up, with mining often blamed for nationwide blackouts.
Crypto for the People—and Capital Flight
While Iran’s government has used crypto to evade sanctions and fund imports, ordinary Iranians have embraced it as a hedge against hyperinflation and currency collapse. With the rial’s value in free fall, many Iranians use crypto to store savings, make international purchases, and receive money from abroad.
This has created a conflict: while the state wants to hoard crypto to stay financially afloat, the public is using it to move capital out of the country. In 2024 alone, crypto outflows from Iran surged by 70%, reaching $4.18 billion, especially during times of geopolitical tension.
To regain control, the government has imposed crypto curfews, restricted exchange withdrawals, and recently made the central bank the sole crypto regulator. It’s also piloting a central bank digital currency (CBDC) called the crypto rial, which critics view as a tool for state surveillance.
What’s Next for Bitcoin?
Despite the volatility, Bitcoin remains resilient thanks to its difficulty adjustment mechanism. Every 2016 blocks (roughly two weeks), the network adjusts mining difficulty to maintain a consistent block time of about 10 minutes. When miners go offline, the difficulty decreases, making it more profitable for remaining miners and ensuring the network continues to function.
That’s exactly what we’re seeing now. While the hash rate crash was dramatic, the network has already begun to recover—just as it did after the China ban and the Kazakhstan blackouts.
Final Thoughts
Bitcoin’s latest hash rate plunge was not the result of a single geopolitical event, but rather a convergence of factors—U.S. economic pressures from a heatwave and Iran’s deeply embedded, complex crypto-mining ecosystem.
It’s a stark reminder of how Bitcoin is no longer just a digital currency—it’s a global economic force shaped by energy markets, political instability, and state strategy. As mining continues to migrate, diversify, and adapt, the future of Bitcoin may well hinge on its ability to remain decentralized, resilient, and above all, antifragile.
