Hashrate Under Fire: Bitcoin’s Weak Spots Exposed by War

The quote “Money likes silence,” often attributed to John D. Rockefeller, has never been more relevant for the crypto market. On June 23, 2025, as Iran launched retaliatory missile strikes against U.S. bases in the Middle East, digital networks twitched in response. This event and the ensuing market chaos clearly show that crypto infrastructure is not autonomous from the physical world, but is deeply sensitive to geopolitical shocks.

Hashrate crash after the strikes on Iran

If the exodus from the country matches the scale of China’s 2021 crackdown, the global hashrate could lose up to 30–40 EH/s in a matter of days. This would further burden other regions, particularly Kazakhstan, Russia, and the U.S., which are already absorbing redistributed capacity.

Some pools, including ViaBTC and F2Pool, which previously relied on Iranian infrastructure, have started temporarily redirecting hashrate to Central Asia, mainly Kazakhstan. This is confirmed by the latest block distribution data on Hashrateindex.

The situation provoked a strong reaction from the crypto community. Some public figures suggested the hashrate drop was not merely a technical side effect of power disruptions but a direct result of political actions. Max Keiser, a media personality and advisor to El Salvador’s president on Bitcoin, published a post on X (formerly Twitter) accusing the U.S. of allegedly targeting Iran to undermine Bitcoin mining.

The claim borders on conspiracy theory but illustrates how emotional technology failures are interpreted amid political escalation. At the same time, the region’s weak telecommunications and energy infrastructure raises doubts about the effectiveness of such hashrate redistribution, especially in a volatile environment.

The on-chain data told an immediate story. According to Blockchain.com, the total computational power of the Bitcoin network plunged from ~886 EH/s to ~672 EH/s between June 21 and June 25—a 24% drop in under four days, marking the sharpest retreat in recent months. The most visible symptom for users was a delay in block generation, with intervals stretching from the usual 10 minutes to as long as 14–15 minutes, leading to network congestion.

Normally, new blocks appear every 10 minutes, but during the decline, intervals stretched to 14–15 minutes. A sudden drop in hashrate not only disrupts normal block production, it also affects users directly: confirmation times increase, mempool congestion grows, and transaction fees can spike during periods of overload.

Such deviations signal a temporary imbalance in network performance until an automatic difficulty adjustment occurs.

How the strikes on Iran impacted energy and mining

In recent years, Iran has ranked among the world’s top 10 mining countries, contributing between 3% and 4.5% of global hashrate, according to the Cambridge Centre for Alternative Finance. Chinese mining pools operating in special economic zones were especially active in the country.

The hashrate decline coincided with reports of electricity shortages caused by attacks on gas and oil facilities. Local authorities suspended electricity supply to industrial sites, including data centers. This forced several mining farms to shut down due to unstable power availability.

For a detailed analysis of the mining market in Iran and the shifts since the beginning of the conflict, see our article Impact of military strikes on Iran’s mining sector.

A Flight to Safety: Where the Capital Went 

Following news, capital began flowing out of crypto assets like Bitcoin, which fell below $100,000. Instead, investors turned to traditional safe-haven assets.

Gold and Bonds: The Classic Safe Havens 

Gold surged nearly 3%, and the largest gold ETF – SPDR Gold Trust (GLD) – saw its assets increase by nearly $1.4 billion within 48 hours. Demand also rose for 10-year U.S. Treasury bonds, with yields falling from 4.32% to 4.18% in a traditional flight to safety.

Oil and Energy Stocks: The Geopolitical Hedge

Brent crude futures rose 7% amid threats to the Strait of Hormuz. Consequently, stocks of major U.S. energy companies like ExxonMobil and Chevron, seen as insulated from Middle East supply disruptions, jumped 4.1% and 3.6% respectively.

The Verdict on “Digital Gold”

These capital flows confirm that during acute geopolitical escalations, institutional investors still do not treat cryptocurrency as a reliable safe-haven asset. Despite its “digital gold” narrative, Bitcoin continues to behave like a highly volatile, risk-on asset in times of crisis.

What’s next: difficulty adjustment, compensation points, and emerging risks

A hashrate decline is not catastrophic, but it highlights the vulnerabilities of distributed infrastructure. Bitcoin’s protocol includes an automatic difficulty adjustment every 2016 blocks (roughly every two weeks), but this mechanism cannot respond quickly to sudden drops in computational power. The delay means users and services must adapt to short-term disruptions without immediate protocol-level compensation.

In the short term, capacity from Kazakhstan, the U.S., and Russia may help stabilize the network. However, some of this infrastructure is already at maximum load and, in some cases, subject to centralized regulation. Restoring previous hashrate levels could take days or even weeks.

New interest is emerging from Canada, Iceland, and South America — countries with relatively cheap and stable energy. If political and economic conditions are favorable, we may see accelerated pool migration and infrastructure expansion in these regions.

Decentralization reduces dependence on political decisions but does not eliminate the network’s vulnerability to physical constraints. Electricity supply, internet access, and stable infrastructure remain critical. Geopolitical risks, energy disruptions, and technical limitations are increasingly influencing cryptocurrency prices. During regional conflicts and infrastructure disruptions, network stability drops, fees rise, and transaction confirmations slow down. All of this shapes investor perception and future market behavior.

Read more about how wars affect the crypto market in our article Shockwaves and Blockchains: How Modern Wars Test the Crypto Market.