Bitcoin’s BTC$68,984.97 mining difficulty dropped by around 11%, its largest decline since China’s 2021 crackdown on the industry, after a sharp decline in hashrate triggered by plunging prices and widespread winter storm-related outages in the U.S.

Mining difficulty, which determines how hard it is to find new Bitcoin blocks, adjusts roughly every two weeks to maintain a 10-minute block interval on the network.

The latest change brought the metric down from over 141.6 trillion to about 125.86 trillion, according to Blockchain.com data, signaling a steep drop in the number of active machines securing the network.

The decline follows a series of blows to miners. Bitcoin prices have fallen significantly from an all-time high of $126,000 in October to around $69,500.

That price drop forced many miners, especially those running outdated equipment and facing high energy costs, to shut down. Some also repurposed their hardware to focus on artificial intelligence (AI), as megacap firms offer stable contracts and often economically irresistible terms.

Bitfarms (BITF) notably saw its share price surge after saying it’s no longer a bitcoin company, and is instead focusing on data center development for high-performance computing and AI workloads.

Bitcoin mining revenue on a per terahash basis, measured via the hashprice, has plunged from nearly $70 at the time the cryptocurrency was trading at an all-time high, to now stand at little over $35.

Severe winter storms, particularly in Texas, compounded the situation. Grid operators issued curtailment requests to conserve electricity for residential users. Public mining firms scaled back production, with some seeing daily bitcoin output fall by more than 60%.

Although a drop in difficulty might appear alarming, it functions as a self-correcting mechanism. For miners who remain online, the reduced competition can increase profitability and help maintain the business model.

Historically, major difficulty drops have also signaled market capitulation, often preceding a stabilization or rebound in price as miners sell the BTC they mine to cover operational expenses.