The Bitcoin hashrate market experienced a period of initial ascent followed by a decline in May 2026, as detailed in Luxor’s latest monthly lookback. Both USD hashprice and the price of Bitcoin saw gains early in the month, peaking around May 6th, before succumbing to downward pressure towards month’s end. Despite this late-month slump, the monthly averages registered increases, with USD hashprice settling at $36.60 per PH/s/day, a 7.9% rise.
Network difficulty, while averaging lower over the month, concluded May at a higher net value than it started. Three adjustments—a decrease on May 1st, followed by increases on May 15th and May 29th—resulted in a 2.5% net increase in difficulty by month-end. This brought the difficulty to 138.96 Terahashes (TH), contributing to average block times of 9 minutes and 22 seconds, consistently faster than the 10-minute target for most of the month. This rapid block production indicates a recovery of marginal hashrate as economic conditions improved mid-month, only to be squeezed again by rising difficulty against a backdrop of declining hashprice.
Key Takeaways
- Mining Economics Reversal: USD hashprice and BTC price rallied early in May, peaking on May 6th, then declined to month-end lows. Monthly averages, however, were higher.
- Difficulty Dynamics: Network difficulty saw three adjustments, ultimately ending May 2.5% higher despite a 1.5% decrease in the monthly average.
- Forward Market Performance (USD): For USD contracts, only the January sale four months ahead outperformed spot mining revenue for May, securing $37.99 against a spot settlement of $36.60.
- Forward Market Performance (BTC): BTC-denominated contract buyers generally outperformed, with sellers experiencing losses ranging from 1.6% to 19.0% compared to spot settlement.
- Forward Curve Shift: As of early June, the forward hashrate curve has shifted into contango, with June and July contracts trading at a premium over spot, reflecting expectations of a near-term difficulty pullback due to summer curtailment periods.
Network Security and Miner Profitability Under Pressure
The fluctuating economics of Bitcoin mining in May 2026 present a complex scenario for both small-scale and industrial miners. While the monthly average hashprice increased, the trend reversal towards the end of the month suggests that profitability margins could tighten significantly. For industrial mining farms utilizing advanced ASIC hardware, the ability to adapt to these shifts through energy cost management and operational efficiency is paramount. However, for smaller, less capitalized operations, the volatility can be a significant challenge, potentially forcing less efficient hardware offline.
The network difficulty’s net increase, despite an averaging decrease, indicates that the total computational power dedicated to mining remained robust. This sustained hashrate deployment, particularly from newer generations of ASIC miners, is crucial for network security. A higher difficulty requires more computational power to mine blocks, making it exponentially harder and more expensive for malicious actors to attempt a 51% attack. However, this increasing difficulty directly impacts the Return on Investment (ROI) for all miners. As difficulty rises, the BTC reward per unit of hashrate decreases, meaning miners must achieve higher efficiencies in both hardware and energy consumption to maintain profitability.
The performance of forward contracts highlights this tension. In USD terms, most forward sales ended up underperforming spot mining, indicating that the market participants who hedged by selling hashrate forward were anticipating lower hashprice outcomes than what was realized on average, though the late-month decline erased earlier gains. Conversely, BTC-denominated contract buyers generally benefited, suggesting that the anticipation of difficulty adjustments and fee fluctuations was more accurately priced into BTC-denominated contracts. This dynamic suggests that miners looking to hedge their revenue streams need to carefully consider the denomination of their contracts, balancing exposure to BTC price volatility against the network’s difficulty adjustments.
USD Hashprice — Rose on Average, Faded into the Close
The monthly average USD hashprice saw a 7.9% increase, moving from $33.92 to $36.60 per PH/s/day. This marked the second consecutive monthly increase following the all-time low period experienced in February–March. However, this average figure masks a significant intra-month trend reversal. The hashprice began May at $36.31, climbed to a peak of $38.96 on May 6th, and then declined to close the month at $33.58. This late-month decline meant the closing price was lower than the opening price, though still substantially above the February 24th daily all-time low of $27.89 and March 2026’s record-low monthly average of $31.27. For context, May 2026’s peak of $38.96 remained at the lower end of the $37.89 to $59.38 range observed for monthly averages in 2025.
BTC Price — Same Arc Under a Persistent Macro Shock
Bitcoin averaged $78,032 in May, a 6.2% increase from April. The price began the month at $77,635, reached a high of $81,580 on May 6th, and subsequently dropped to a low of $73,366 by May 28th, closing at $73,761. After experiencing a drawdown in February and then correlating with risk assets during April’s equity rally, Bitcoin spent May relinquishing its early monthly gains. The prevailing macroeconomic factor influencing this trend was the ongoing geopolitical conflict in the Middle East, specifically after direct strikes on Iranian targets and Iran’s closure of the Strait of Hormuz. While this event impacts global oil and LNG trade, its direct effect on the cost of electricity for the majority of the global hashrate (which relies on grids largely decoupled from crude oil prices) is limited. Only mining operations in Gulf states are directly exposed. Despite the macro overhang on BTC price, the network’s hashrate recovered to near 1 Zettahash per second (ZH/s) by month-end, offsetting earlier losses due to new-generation hardware deployment.
Network Difficulty — Averaged Lower, Netted Higher
May’s average network difficulty was 134.95 TH, a 1.5% decrease from April. However, the month saw three difficulty adjustments: a -2.30% drop on May 1st, followed by a +3.12% increase on May 15th to 136.61 TH, and a further +1.72% rise on May 29th to 138.96 TH. The net result was a 2.5% increase in difficulty from the beginning to the end of the month. Block times averaged 9 minutes and 22 seconds, with 27 out of 31 days seeing block times below the 10-minute target. This phenomenon was driven by marginal hashrate returning as economics improved mid-month, subsequently leading to difficulty increases as hashprice declined, thereby squeezing miner margins by month-end.
Revenue per unit of electricity consumed showed improvement. For mining fleets with efficiencies below 19 Joules per Terahash (J/TH), the implied energy hashprice averaged approximately $90/MWh. Fleets operating between 19–25 J/TH saw around $69/MWh, and those between 25–38 J/TH averaged about $48/MWh. Against an estimated network-average power cost of $46/MWh, the less efficient 25–38 J/TH tier narrowly broke even on average, indicating a recovery from earlier deficits in Q1.
Transaction Fees — Up Modestly
Transaction fees collected per block saw a modest increase of 9.6% in May, rising to 0.01941 BTC from April’s 0.01771 BTC. This represents approximately 0.62% of total block rewards, remaining below 1% since July 2025. In USD terms, the average fee revenue per block approximated $1,514, a 16.0% increase from April’s $1,306.
BTC Hashprice — Up With Difficulty Relief and Higher Fees
The average BTC hashprice rose by 1.6% in May, from 0.00046128 to 0.00046887 BTC per PH/s/day. This increase was driven by two factors: a lower average network difficulty (-1.5%) and a rise in transaction fees (+9.6%). These combined elements increased the BTC reward per unit of hashrate. Within May, BTC hashprice started at 0.000468, peaked at 0.000479 on May 9th-10th when difficulty was at its lowest, and then declined to a monthly low of 0.000455 as the difficulty adjustments on May 15th and 29th pushed it back towards the 1 ZH/s level.
May 2026 Hashrate Market Activity
The hashrate market in May 2026 saw varied performance in forward contracts. For USD-denominated contracts, only sales made four months in advance (in January 2026) at $37.99 per PH/s/day managed to outperform the spot settlement of $36.60. All other USD forward sales settled below the spot price, reflecting the late-month decline in hashprice. In contrast, BTC-denominated contract buyers generally saw positive returns, as the dip in network difficulty allowed BTC hashprice to settle above forward lock-in rates for several contract durations.
Analysis of rolling hedge strategies over the trailing twelve months (June 2025–May 2026) showed that USD-denominated hedges outperformed spot mining across various horizons, particularly longer-term contracts that benefited from locking in rates before the significant BTC price declines of early 2026. BTC-denominated rolling hedges showed flatter returns in this period. Looking back to the April 2024 halving, BTC-denominated strategies generally held an edge, though this advantage has narrowed as network difficulty growth has moderated.
How Future Hashrate Traded in May 2026
During May 2026, the USD-denominated hashrate forward curve trended downwards, influenced by Bitcoin’s retreat from its early-May peak. Contracts for June through October 2026 saw their locked-in rates decrease by approximately 13% from May 4th to June 1st. The market largely traded in backwardation, indicating expectations of lower near-term hashprice, primarily driven by BTC price dynamics impacting USD hashprice forecasts.
The BTC-denominated forward curve exhibited more stability, with an average decrease of only about 2% over the same period. This suggests that expectations regarding difficulty and fees were more cautiously adjusted. The forward market, assuming consistent fee collection, implied a modest increase in difficulty and network hashrate for the June–October 2026 timeframe. As of early June, the USD curve has shifted into contango, signaling expectations of a summer difficulty decrease due to curtailment events, followed by a rebound in the autumn.
Concluding Thoughts and Looking Ahead
As of early June, Bitcoin has experienced further price declines, trading around $60,000, and USD hashprice is hovering near $27-28 per PH/s/day. The geopolitical situation in the Middle East has also escalated, impacting oil prices and potentially influencing broader market sentiment. The brief respite in mining economics experienced after the February-March lows has thus reversed.
The 4CP Question: Will Texas Curtailment Bend Difficulty Again?
The mechanism of Four Coincident Peak (4CP) pricing in Texas is poised to influence network difficulty during the summer months. Historically, miners in ERCOT (which accounts for a significant portion of the global hashrate) have reduced their power consumption during peak demand intervals (June-September) to minimize transmission costs. This curtailment leads to slower block times and has historically resulted in lower network difficulty adjustments during these months compared to the rest of the year. For instance, from 2022 to 2025, average monthly difficulty adjustments during 4CP months were 1.03%, compared to 2.17% for the rest of the year. This seasonal drag is particularly evident in June, which has historically seen negative difficulty adjustments, while October typically experiences the strongest positive adjustments as curtailment ends and hashrate recovers.
The forward hashrate market reflects these expectations. The current contango structure for June and July contracts, trading at a premium to spot, prices in this anticipated difficulty decrease. Conversely, the backwardation observed in contracts from November onwards reflects the expected difficulty rebound as summer curtailment concludes.
Looking Ahead
Luxor’s Hashrate Forward Market is currently pricing an average hashprice of $28.94 (or 0.00047 BTC per PH/s/day) for the next six months. This presents an opportunity for both sellers seeking to lock in this rate and buyers aiming to secure it through November 2026.
For further information on Luxor’s Bitcoin mining derivatives, inquiries can be directed to [email protected] or through their website at https://www.luxor.tech/derivatives.
Based on materials from : hashrateindex.com