The Bitcoin network’s mining difficulty has once again moved in a volatile direction, highlighting how external shocks—from extreme weather to regulatory pressure—continue to ripple through the ecosystem. In the most recent adjustment window, the metric dropped about 11.16% in the last 24 hours, marking the steepest one-day decline since China intensified its 2021 crackdown on crypto mining. With the adjustment taking effect at block 935,429, the difficulty sits around 125.86 terahashes and the network’s average block time hovers near 9.47 minutes, just shy of the 10-minute target. Industry observers note that the next adjustment, set for February 20, is forecast to rebound by roughly 5.63% to about 132.96 T, according to CoinWarz data. The sequence underscores how sensitive the network remains to a mix of weather-related outages, shifting energy economics, and ongoing structural changes within the mining sector.

Key takeaways

• Bitcoin mining difficulty fell by about 11.16% in the last 24 hours, the largest one-day drop since the 2021 crackdown in China.
• Current difficulty is 125.86 T at block 935,429, with an average block time near 9.47 minutes, underscoring continued efficiency pressure in the network.
• The next adjustment on February 20 is projected to rise about 5.63% to roughly 132.96 T, signaling a partial recovery after the recent pullback.
• A severe winter storm in January—Winter Storm Fern—disrupted power grids across 34 states and trimmed US miner hashrate, illustrating how weather can translate into measurable network effects.
• Foundry USA, the world’s largest mining pool by hash rate, briefly saw its capacity cut by around 60% during the storm, shrinking from about 400 EH/s to 198 EH/s before recovering to above 354 EH/s and maintaining a sizable market share.
• January’s broader picture showed the Bitcoin network hashrate retreating to a four-month low as miners reallocate to compute workloads beyond traditional mining.

Tickers mentioned: $BTC

Market context: The ongoing mix of supply-side disruption (weather-related outages), regulatory pressures, and energy-market dynamics continues to shape miner behavior and network security, with a notable tilt toward more flexible, high-availability compute deployments beyond pure traditional mining.

Why it matters

Bitcoin’s security and block production depend on the global distribution of mining power. The recent difficulty drop—driven in part by infrastructure outages tied to Winter Storm Fern—signals how external shocks can temporarily reduce the aggregate hashing power securing the network. The subsequent projected rebound in the next adjustment suggests a partial normalization as operations restart and energy systems stabilize. The episodes also highlight a broader resilience dynamic: as traditional mining pools feel weather- and grid-related constraints, some miners have pivoted toward diversified compute applications, including AI data centers and other high-performance computing tasks, which can alter the geographic and economic makeup of hashrate distribution (CRYPTO: BTC).

The storm’s impact underscores the fragility of mining-dependent infrastructure. The disruption forced US-based miners to curb energy usage and pause operations, translating into a lower total network hashrate and a temporary easing of the computational pressure that underpins Bitcoin’s protocol security. Foundry USA—widely recognized as the largest pool by hashrate—reported a dramatic swing, with hashing power plummeting from nearly 400 EH/s to about 198 EH/s in the storm’s wake, just as the grid faced outages across broad swaths of the country. The fallout was nonetheless transitively mitigated as operations regained traction and hashing power rebounded in the days that followed, reflecting a resilient but stressed sector laced with concentrated capacity.

Even as the storm receded, the broader January data painted a picture of a network navigating a quieter, more cost-conscious cycle. The total Bitcoin hashrate declined to a four-month low, a reflection of both macro crypto market headwinds and miners’ strategic realignment toward compute tasks that can leverage surplus energy during off-peak periods. This pattern aligns with a wider industry trend: operators are increasingly balancing long-term capital commitments with shorter-term flexibility to adapt to energy prices, grid reliability and shifting demand profiles for computing power beyond proof-of-work competition alone.

Why it matters

The sequence of events surrounding mining difficulty and hashrate carries implications for both the security architecture and the economics of running a mining operation. A lower difficulty can ease block production temporarily, potentially affecting miners’ revenue dynamics, especially for those with higher energy costs or less efficient hardware. Conversely, the forecasted rebound in the next adjustment hints at a prompt re-consolidation of hashrate, which could re-tighten margins for smaller operators and increase the concentration of power among larger pools with greater resilience to weather-related shocks.

From a market perspective, the volatility in hashrate can coincide with price fluctuations, adding another layer to the already complex relationship between mining activity and Bitcoin’s spot market. The January and February patterns suggest a sector that remains highly reactive to externalities—weather, policy signals, and the evolving balance of energy economics—while continuing to innovate around operational efficiency and diversification of compute workloads. Those dynamics will influence how quickly the network can absorb future disruptions and how miners price risk in a landscape where energy costs, hardware depreciation, and regulatory risk remain in sharp relief.

What to watch next

• February 20: The next mining-difficulty adjustment and the degree of rebound toward 132.96 T.
• Restart and stabilization of Foundry USA’s hashrate; monitoring for any long-term shifts in pool market shares.
• Any policy or grid reliability developments that could affect U.S. mining operations and energy availability.
• New data on how miners allocate capacity between traditional mining and other compute workloads, including AI data centers.

Sources & verification

• CoinWarz difficulty charts and block data for Bitcoin (CRYPTO: BTC) at block 935,429 and the projected February adjustment.
• AccuWeather reporting on Winter Storm Fern and its impact on regional power infrastructure in the United States.
• Hashrate Index pool-market-share data reflecting Foundry USA’s post-storm recovery and market position.
• Cointelegraph reporting on January’s hashrate declines and the broader context of miner activity during weather events.

Bitcoin mining difficulty, storms and the path to the February adjustment

Bitcoin (CRYPTO: BTC) mining difficulty dipped about 11.16% over the past 24 hours, underscoring how swiftly external conditions can influence the security and economics of the network. The current reading places the difficulty at roughly 125.86 T, with the adjustment taking effect at block 935,429. The network’s average block time sits at about 9.47 minutes, a hair under the 10-minute target that helps maintain predictable issuance and transaction throughput. CoinWarz tracks the data behind the scene, and projections for February 20 show a likely rebound of around 5.63%, lifting the metric toward 132.96 T. This sequence—sharp decline followed by expected recovery—was anticipated by observers who have watched a pattern emerge since the 2021 China crackdown, when mining operations shifted dramatically in response to policy changes and market conditions.

The context for the latest adjustment owes much to a storm season that has repeatedly stressed the Bitcoin network’s fundamentals. Winter Storm Fern swept across much of the United States in January, disrupting electrical infrastructure and forcing curtailment of miner energy use in 34 states across roughly 2,000 square miles. The immediate consequence was a measurable throttling of the network’s total hashrate and a temporary softening of the hash-power centralization that had been building in certain corridors of mining activity. As outages and grid instability mounted, the resilience of large-scale operators—bolstered by diversified energy sourcing and operational cadence—helped the sector rebound once the storm abated.

One consequence of the weather-driven disruption was its impact on the largest mining pool by hashrate: Foundry USA. The bloc of hashing power belonging to this operator was temporarily slashed by around 60%, dropping from near 400 EH/s to about 198 EH/s during the peak of Winter Storm Fern. Hashrate Index corroborates the shift in market dynamics, noting how the pool’s share waxed and waned with the storm’s intensity. In the days that followed, Foundry USA’s hashrate recovered to more than 354 EH/s, renewing its status as a dominant force in the network with a market share hovering around 29.47% at the time of reporting. The broader narrative is that while the storm caused an abrupt pullback, the sector’s capacity to bounce back remained evident as miners reconnected with power sources and recommenced operations.

Beyond the storm, January’s overall momentum pointed to a four-month low in total Bitcoin hashrate, signaling a period of caution as miners assess the balance between energy costs, hardware depreciation, and the macro crypto environment. The combination of weather-related outages and market headwinds has prompted a cautious stance among some operators, who are re-evaluating risk profiles and exploring adjacent compute workloads to maximize asset utilization during periods of mining downtime. The result is a nuanced picture: even as the next difficulty adjustment points to a potential rebound, the path forward may involve continued strategic shifts as the industry recalibrates in response to evolving incentives and constraints.

The shift in expectations for U.S. monetary policy is spreading through markets as traders digest the potential implications of a hawkish Fed chair nominee. With Fed watchers weighing the odds of a March rate cut, data from CME Group’s FedWatch tool shows the probability cresting at about 23%—up from roughly 18.4% late last week. The move signals a re-pricing of near-term easing, even as the broader consensus remains modest about the size of any forthcoming cuts. The spike comes as Donald Trump’s January nomination of Kevin Warsh to lead the Federal Reserve raises questions about how aggressively the central bank will continue to reduce accommodation, especially if the new chair advocates shrinking the balance sheet. Powell’s current term ends in May, a factor that injects political nuance into policy timing and market expectations.

Markets have traditionally responded to shifts in liquidity and rate expectations, and the current dynamic underscores how a single nomination can ripple through asset prices. In crypto markets, the relationship is nuanced: easing liquidity tends to support risk assets, while tighter conditions can constrain funding and access to capital. The debate over Warsh’s approach—especially his stance on the central bank’s balance sheet—has amplified concerns about financing conditions, which in turn can influence portfolios across equities, commodities, and digital assets. The linked data and commentary reflect a broader narrative in which policy trajectory and balance-sheet strategy are seen as primary drivers of liquidity in the months ahead.

Analysts have pointed to Warsh’s past views on the Fed’s balance sheet as a potential source of policy risk. He has argued that the balance sheet is “trillions larger than it needs to be,” a characterization that underscores the debate over whether a shrinking balance sheet could tighten financial conditions. If the new chair pursues a deliberate reduction in liquidity, markets may Face a period of heightened sensitivity to macro signals, with consequences for riskier assets that rely on easy financing. Krakken’s global economist Thomas Perfumo described Warsh’s nomination as sending a mixed macro signal to investors, suggesting that liquidity dynamics could shift without a clear, immediate direction. In this context, some observers caution that the Fed may pivot more slowly toward easing if balance-sheet normalization becomes a priority, complicating the trajectory of asset prices across markets.

The rhetoric around policy has also interacted with other market dynamics. Earlier in the year, concerns about hawkish bias contributed to declines in certain precious metals and other risk-sensitive assets, illustrating how policy expectations can ripple beyond equities into broader markets. Market participants have emphasized that the Fed’s policy stance will remain a focal point, with the potential to influence how crypto assets—especially those sensitive to liquidity and funding costs—behave in a volatile macro environment. The conversation around Warsh continues to evolve as investors monitor official statements, committee communications, and potential congressional signals that could shape policy timing and tone. For context, one of the linked pieces explores how Fed rate decisions can affect crypto holders, underscoring the linkage between traditional financial conditions and digital-asset markets.

Market reaction and policy expectations as Warsh nomination stirs caution

Bitcoin (CRYPTO: BTC) and other major digital assets could find themselves navigating a scenario in which the Fed’s balance-sheet strategy and rate path become more influential than in the recent past. The discussion around Warsh’s stance fills a gap in the market’s understanding of how aggressively the central bank will normalize policy, particularly if rate cuts are viewed as contingent on liquidity conditions rather than purely economic data. The scenario described by market analysts includes a tension between supportive financial conditions for risk assets and the prospect of a tighter funding environment if the balance sheet is reduced. The potential for a slower easing cycle or a longer period of higher rates could temper enthusiasm for speculative assets, even as demand from long-term investors remains a factor in broader market dynamics. This cross-asset sensitivity underscores why traders are watching Fed communications with heightened attention, recognizing that even modest shifts in the policy mix can alter capital flows and risk sentiment across markets.

As policymakers and markets await more clarity, the conversation around liquidity remains central. Warsh’s nomination has intensified worries about a “lower-liquidity environment” if policy steps move toward balance-sheet contraction. The fear is not limited to traditional markets; crypto-specific funding channels—such as margin lending, swaps, and decentralized finance—could feel the impact of tighter credit conditions if the central bank signals a cautious approach to balance-sheet normalization. The broader takeaway is that the policy pathway now carries an additional layer of uncertainty, with the potential to influence price discovery in both conventional and digital-asset markets. The YouTube commentary embedded above captures some of the real-time reactions and expert assessments shaping this narrative, illustrating how political developments dovetail with macroeconomic policy in a rapidly evolving environment.

In this context, market participants are recalibrating their expectations for how quickly the Fed might shift from tightening to easing, and how the new leadership could interpret the central bank’s own balance in the years ahead. The discussion also intersects with ongoing debates about crypto liquidity, funding rates, and the resilience of digital-asset markets in the face of tightening macro conditions. While some observers argue that a hawkish tilt would dampen risk appetite, others contend that a well-communicated framework and credible policy path could stabilize expectations and reduce volatility over time. The evolving discourse highlights the delicate balance between policy credibility and market confidence, a dynamic that will likely shape both traditional and crypto markets in the near term.

Analysts emphasize that the March FOMC meeting remains a pivotal moment for policy signaling. While a 25 basis-point cut remains a modest possibility, expectations of a larger cut or aggressive easing appear unlikely under the current dialogue surrounding balance-sheet management. As investors integrate these considerations, they are closely tracking the CME FedWatch data, official statements from the Fed, and the evolving commentary surrounding Warsh’s nomination. The implications are not limited to rate paths; they extend to liquidity, credit conditions, and the ability of market participants to access funding in a climate where policy choices carry more weight than was anticipated even a few months ago.

Why it matters

The intersection of Fed policy expectations and crypto markets matters for several reasons. First, liquidity remains a foundational driver of asset prices. If the Fed signals a path toward balance-sheet reduction or maintains a higher-for-longer rate stance, funding conditions could tighten, increasing the cost of capital and reducing speculative activity in risk-on segments, including digital assets. Second, the alignment—or misalignment—between policy signals and market expectations can create abrupt shifts in risk sentiment, potentially triggering faster moves in crypto prices than in traditional markets during periods of macro uncertainty. Third, the nomination of Warsh, which has become a focal point for market analysts, underscores how political dynamics can influence monetary policy and, by extension, the liquidity environment that crypto traders rely on for leverage and liquidity provision. Finally, the broader macro backdrop—ranging from inflation dynamics to credit conditions—continues to shape how investors allocate across asset classes and risk profiles, with crypto assets often sensitive to shifts in liquidity and market sentiment.

For traders and builders in the crypto space, these developments highlight the importance of robust risk management and hedging strategies that account for macro-driven volatility. The potential for a tighter policy regime means that on-chain liquidity provision, cross-asset funding costs, and risk premia across DeFi and centralized exchanges could experience heightened sensitivity to macro headlines. While policy uncertainty can compress near-term gains, it can also create opportunities for long-term participants who position themselves for resilience in evolving liquidity dynamics. As the Fed’s policy conversation progresses, the crypto ecosystem will continue to watch for signals that indicate whether liquidity will be favored or constrained in the months ahead.

What to watch next

• March FOMC decision and summary of the committee’s projections, including any changes to the rate path.
• Public statements or confirmations from Kevin Warsh regarding balance-sheet policy and duration of any normalization steps.
• Updates on liquidity indicators and market funding conditions, including crypto-specific funding metrics and DeFi activity.
• Market reactions to Fed communications, and any revisions to the CME FedWatch probability for March or subsequent meetings.
• Regulatory or policy signals that could influence liquidity, including broader macro trends and currency-market dynamics that affect cross-asset flows.

Sources & verification

• CME Group FedWatch tool data showing March rate-cut probabilities.
• Cointelegraph article: Kevin Warsh officially picked as Federal Reserve chair.
• Cointelegraph explainer: Impact of Fed interest rates on crypto holders.
• Cointelegraph coverage referencing Bitcoin and macro policy dynamics in relation to liquidity and risk sentiment.

• Vietnam proposes 0.1% personal income tax on crypto transfers through licensed platforms nationwide (99 characters)
  
• Vietnamese institutional investors will face 20% corporate income tax on crypto transfer profits (97 characters)
  
• Five-year crypto pilot program launched September 2025, all transactions must use Vietnamese dong (99 characters)
  
• Digital asset exchanges require VND10 trillion minimum capital, three times higher than banks (95 characters)
  

Vietnam’s Ministry of Finance has released a draft circular proposing a 0.1% personal income tax on crypto asset transfers through licensed platforms.

The tax framework mirrors the current securities trading regime and applies regardless of residency status. Vietnamese institutional investors will face a 20% corporate income tax on crypto transfer income.

The draft exempts crypto transactions from value-added tax while establishing clear tax obligations for market participants.

Tax Framework Mirrors Securities Treatment

The draft circular introduces a straightforward taxation approach for crypto asset transfers in Vietnam. Individual investors will pay 0.1% of transaction turnover per transfer when using platforms operated by licensed service providers. This rate matches the existing tax treatment for securities trading in the country.

The framework applies to all individual investors conducting crypto transfers through regulated channels. Residency status does not affect the tax obligation under the proposed rules.

Both Vietnamese residents and foreign individuals will face the same 0.1% rate on transaction turnover.

The Ministry of Finance has exempted crypto asset transfers and trading from value-added tax requirements. This classification treats crypto activities as non-taxable for VAT purposes.

The exemption reduces the overall tax burden on crypto transactions compared to many traditional financial activities.

Corporate investors established in Vietnam face different tax obligations under the draft framework. These institutional investors will pay 20% corporate income tax on profits from crypto asset transfers. Taxable income is calculated as the selling price minus purchase costs and directly related expenses.

Pilot Program Sets High Entry Barriers

Vietnam officially launched a five-year pilot program for the crypto asset market in September 2025. The pilot phase requires all crypto activities to be conducted in Vietnamese dong.

Trading, issuance, and payments must use the national currency during this experimental period.

The pilot program encompasses multiple aspects of the crypto market ecosystem. Activities include the offering and issuance of crypto assets. The framework also covers the organization of trading markets and the provision of related services.

Regulatory authorities are implementing the pilot on a cautious and controlled basis. The approach prioritizes safety, transparency, and protection of participant rights. Both organizations and individuals engaged in the market receive safeguards under the framework.

The draft rules establish substantial capital requirements for digital asset exchanges. Enterprises must maintain a minimum charter capital of VND10 trillion, equivalent to $408 million.

This threshold stands three times higher than the requirements for commercial banks and 33 times that of aviation transport companies. Foreign investors can hold up to 49% equity in these exchanges under current proposals.

The Ministry of Finance has opened the draft circular for public consultation. Before this dedicated framework, crypto transfers were taxed using the same methods as securities transactions. The new rules aim to provide clarity and structure for Vietnam’s emerging crypto market.

TLDR:

• MicroStrategy holds $49.4B in Bitcoin against only $8.2B debt, maintaining a six-to-one coverage ratio 
• Company maintains $2.25B cash reserves covering 2.5 years of dividend payments without Bitcoin sales 
• Earliest debt maturity arrives in September 2028, allowing time for potential Bitcoin cycle recovery 
• Company held through 16-month downturn in 2022 when Bitcoin fell 50% below average purchase price

MicroStrategy bankruptcy concerns have dominated crypto discussions as Bitcoin prices fluctuate. However, recent analysis of the company’s financial structure reveals a different picture than the prevailing narrative suggests.

The business intelligence firm holds Bitcoin reserves worth approximately $49.4 billion against total debt of $8.2 billion. This substantial asset-to-liability ratio contradicts widespread predictions of imminent financial collapse.

Meanwhile, cash reserves and extended debt maturity timelines provide additional protection against short-term market volatility.

Financial Structure Provides Multiple Layers of Protection

The asset coverage ratio stands at roughly six-to-one, with Bitcoin holdings far exceeding debt obligations. Crypto analyst Crypto Rover addressed the bankruptcy narrative directly, stating “the reality is most people spreading this FUD do not understand how MicroStrategy’s balance sheet is structured.”

The analysis breaks down multiple protective layers within the company’s financial position. “At current levels, MicroStrategy’s Bitcoin holdings are worth roughly $49.4B, while total company debt is about $8.2B,” Crypto Rover noted. This means their Bitcoin reserve is almost six times larger than their debt obligations.

Beyond the Bitcoin reserve itself, MicroStrategy maintains USD cash reserves totaling around $2.25 billion. Regarding dividend concerns, Crypto Rover explained “the company has built a USD cash reserve of around $2.25B. That alone can cover dividend payments for 2.5 years without selling a single BTC.” Annual dividend obligations total approximately $890 million.

Debt maturity schedules further reduce near-term pressure on the company. “Strategy’s debt is not due immediately. The earliest maturity comes in September 2028,” according to the analysis.

Additional maturities follow in December 2029 and June 2032. This timeline aligns favorably with Bitcoin’s historical four-year market cycles, potentially allowing prices to recover before major debt obligations arrive.

Historical Performance Demonstrates Resilience Under Stress

MicroStrategy already survived a severe market test during 2022 and early 2023. Bitcoin prices fell nearly 50 percent below the company’s average purchase price of $30,000. The cryptocurrency remained at those depressed levels for approximately 16 months.

Crypto Rover highlighted the company’s response during that period: “Even then: They did not panic sell, They did not liquidate holdings, They held through the drawdown.” Only 200 Bitcoin were sold for tax loss harvesting purposes, and those coins were subsequently reacquired.

This real-world stress test validates the company’s commitment to its long-term strategy. “There is already a real historical stress test, and they held through it,” the analysis emphasized. The precedent demonstrates management’s willingness to weather extended market downturns.

Recent claims about exchange transfers have largely proven unfounded or misinterpreted. “There have been viral screenshots claiming MicroStrategy is moving BTC to exchanges. Most of these are either misinterpreted or fake,” Crypto Rover stated. No verified evidence supports accusations of distressed selling behavior.

The current fear narrative follows familiar patterns from previous market cycles. “Every cycle has a dominant fear narrative,” the analyst observed, comparing current concerns to past Tether collapse predictions that never materialized.

When examining actual financial data rather than speculation, the bankruptcy thesis lacks supporting evidence.