Bitcoin miners are making millions by shutting down because of a massive US winter storm

Earlier this week, a sweeping US winter storm pushed Bitcoin miners to curtail, pulling a noticeable chunk of computing energy off the community in a brief window.

Data reveals a 40% dip in hashrate between Jan. 23 and Jan. 25, with round 455 EH/s going offline, and block manufacturing slowing to round 12 minutes for a stretch.

The proven fact that the sharpest drop got here from Foundry USA, the most important mining pool with the most important presence within the US, tells you that the drop was prompted by curtailments.

Why can so many miners now shut off rapidly? Why would they ever select to do it, and what do these decisions imply for Bitcoin’s safety funds, transaction circulate, and the politics of plugging a giant industrial load into a grid that may get confused in excessive chilly?

Curtailment 101: miners as versatile load, not fragile infrastructure

While curtailment is straightforward in definition, it is type of messy in follow. At the best stage, it is miners decreasing electrical energy consumption, both partially or totally, because energy is scarce, costly, or contractually extra useful to promote again to the grid than to burn by ASICs.

In the US, and particularly in Texas, that alternative has matured into a full-blown enterprise mannequin. ERCOT has explicitly created mechanisms meant for “giant versatile prospects” that may cut back load throughout peak demand, and it named Bitcoin mining amenities as a core instance.

The concept is easy: if a load can drop rapidly, reliably, and repeatedly, a grid operator can deal with it as a pressure-release valve throughout tight situations.

In actual mining fleets, curtailment tends to fall into three buckets.

The first is solely financial. Miners watch a easy unfold: income per unit of hash versus the all-in price of producing that hash. When real-time energy costs spike, the most affordable determination could be to simply cease hashing.

This isn’t any charity, and it is actually not some type of company ethical stance. It’s simply your fundamental unit economics measured minute by minute, particularly for miners uncovered to wholesale pricing.

The second is contracted. Some miners signal demand-response preparations the place the “off swap” is successfully half of the product they promote.

Texas has supplied a number of methods for versatile load to take part in reliability applications, and the previous couple of years have produced a lot of cases of miners profiting throughout stress occasions by curbing or promoting contracted energy again into the market.

Company disclosures present miners can earn cash for not consuming energy when the grid is tight. In Riot’s August 2023 update, the corporate break up the haul into two buckets: $24.2 million of “energy Credits,” which it describes as energy curtailment credit earned by promoting contracted energy again into ERCOT at market spot costs, plus $7.4 million of one thing referred to as “demand response credit,” tied to participation in ERCOT demand response applications.

The smaller, routine variations of this present up in virtually all of Riot’s month-to-month reporting. In its November 2025 replace, Riot listed $1 million in estimated energy curtailment credit and $1.3 million in estimated demand response credit, noting that these demand response credit got here from participation in ERCOT and MISO applications and that the mixed credit are netted towards its all-in energy price.

Iris Energy’s investor replace from August 2023 stated its Texas website generated about $2.3 million in “energy gross sales,” described as energy credit primarily pushed by voluntary curtailment underneath hedge contracts tied to ERCOT real-time costs.

In that setup, a mining website is nearer to a hybrid of knowledge heart and energy dealer than the outdated psychological mannequin of a warehouse that simply runs ASICs till they break.

The third is emergency or rule-driven. Texas now expects the most important new masses to be curtailment-ready as a situation of interconnection in grid-emergency eventualities, explicitly naming crypto miners and knowledge facilities among the many targets.

That issues because it turns curtailment from one thing good to have into one thing that is now constructed into the working plan.

What makes this week’s storm helpful as a instructing second is that the incentives line up.

Cold snaps elevate heating demand, which tightens reserve margins and infrequently triggers conservation alerts. The storm was significantly disruptive for the US power system, with worth spikes and operational pressure reported throughout areas.

So, in case you’re a miner sitting on a flexible load association, curtailment is usually the cleanest, most rational response to a grid that’s out of the blue valuing a megawatt greater than a terahash.

This can be why the pool-level image can transfer quick. When US-heavy operators curtail, their swimming pools register it virtually instantly. The week’s curtailment impact was most simply seen by the seen drop in Foundry’s hashrate and the knock-on slowdown in blocks.

While the community is international, the marginal hashrate swing can nonetheless be regional when sufficient capability clusters behind a handful of operators and grid regimes.

Bitcoin’s issue timer: why sluggish blocks are normally a non permanent tax

A hashrate shock scares individuals because they map it on to safety. That’s true, however in a very slender sense, because fewer hashes per second means the brute-force price of attacking the chain is decrease than it could be at peak hashrate.

But the extra vital operational query is what Bitcoin does when hashes disappear rapidly. The reply is that Bitcoin has a built-in recalibration mechanism with a built-in delay.

Bitcoin targets one block roughly each 10 minutes, nevertheless it would not regulate issue repeatedly. It adjusts issue each 2,016 blocks primarily based on how lengthy the final 2,016 blocks took to mine.

That construction creates the short-term “storm tax.” If a lot of miners shut off at the moment, blocks can be sluggish at the moment. However, the problem would not immediately drop to compensate; the community simply produces blocks extra slowly till sufficient of them cross for the subsequent adjustment to reprice the work.

You may see that going down in actual time this week. CoinWarz’s issue dashboard confirmed the community working slower than the 10-minute goal, with common block time above goal throughout the window it tracked.

When block manufacturing stretched to roughly 12 minutes, it was the lived expertise of that lag: fewer blocks per hour, slower confirmations on common, and a mempool that may thicken if transaction demand holds regular.

But sluggish blocks aren’t Bitcoin “breaking,” they’re Bitcoin charging customers and miners a time price for abrupt adjustments in hash provide.

If the shock fades rapidly and miners come again on-line as costs normalize and grid stress eases, the community might by no means want a issue adjustment. If the shock persists, the subsequent adjustment will decrease issue and pull block timing again towards the goal.

The charge market may behave in ways in which confuse informal observers. A brief spell of sluggish blocks can elevate charge stress if demand is regular, however it might probably additionally cross quietly if the mempool wasn’t tight to start with and demand is gentle.

The larger level right here is that Bitcoin’s design assumes mining energy is opportunistic and typically transient. Difficulty adjustment is the protocol’s approach of accepting that actuality with out turning each native infrastructure occasion into a systemic failure.

Winter storms as repeat stress checks: Uri, Elliott, and what 2026 provides

This is not the primary time winter climate has affected Bitcoin. What modified is the size of the US footprint and the way built-in miners have turn into in grid applications.

Start with Winter Storm Uri in February 2021, the fashionable reference level for Texas grid trauma. Uri drove a historic demand surge whereas technology failed throughout gasoline sorts, triggering widespread outages and a political reckoning.

Back then, large-scale bitcoin mining was far much less intertwined with Texas reliability planning. The trade was smaller in-state, and the “miners as versatile load” idea was virtually utterly theoretical. That’s considerably completely different than at the moment’s setup, the place curtailment is less complicated to coordinate and much more widespread.

Uri issues for this story because it units the political backdrop. After a disaster like that, any giant new electrical energy consumer will get measured towards a easy query: Will you make the subsequent emergency higher or worse?

Now bounce to Winter Storm Elliott in December 2022, the episode that extra instantly resembles this week’s hashrate sample. Galaxy’s 2022 mining report described Elliott as a second when miners curtailed as a lot as 100 EH of hashrate, framing it as roughly 40% of community hashrate on the time, completed to assist stabilize the grid.

Separate academic and policy discussions have additionally cited the identical order of magnitude, reinforcing that Elliott was a main curtailment occasion somewhat than a blip in hashrate.

Elliott is the clear comparability because it confirmed two issues without delay. First, giant miners can shut off at scale on brief discover throughout excessive chilly. Second, as soon as miners construct curtailment into their business relationships, these shutoffs turn into legible and, in some circumstances, anticipated.

What does 2026 add? It provides the truth that “versatile load” is not largely about miners, however about a broader class of large compute masses.

The US Energy Information Administration has described Texas as a heart of quick electrical energy demand progress, explicitly calling out knowledge facilities and cryptocurrency mining as main contributors and pointing to ERCOT’s task-force model oversight round giant masses.

That issues because the grid politics change when versatile load stops being a area of interest. Once AI knowledge facilities and different compute-heavy amenities compete for the same interconnection capacity and the identical public endurance, miners lose the power to argue that they are a particular case.

They turn into one class inside a broader debate about who will get energy first throughout stress, and who pays for the grid upgrades wanted to serve everybody.

Bloomberg’s reporting on the storm pointed in the identical path, discussing how giant industrial masses, together with crypto mines and knowledge facilities, decreased energy use throughout the occasion and the way ERCOT’s demand expectations moved as situations developed.

That type of framing from the mainstream media is a reminder that the subsequent decade of mining within the US can be narrated by grid governance as a lot as by Bitcoin worth cycles.

So the hashrate drop this week is finest learn as a preview. As the US share of mining stays giant and as compute masses maintain scaling, climate occasions will maintain producing these short-lived community slowdowns. The protocol can deal with them. The political surroundings is much less forgiving.

Bitcoin’s issue timer makes curtailment survivable for the chain, and flexible-load economics could make curtailment worthwhile for miners. The open query is whether or not regulators and residents settle for the discount: a giant new load that guarantees to depart when requested, in change for the best to plug in the remainder of the time.

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