I did a back-of-envelope calculation that it is possible for BitCoin to get into this kind of death spiral, but it's not very likely. In the hypothetical scena

I did a back-of-envelope calculation that it is possible for BitCoin to get into this kind of death spiral, but it's not very likely. In the hypothetical scenario that the mining rate drops to just tens of percents of the original, then the utility of BitCoin drops because transactions get both slower and more expensive. This could cause a "run on the bank" where people try to get their money out, but can't transact on the network. If the next hash rate change is far enough out and a panic sets in long enough, then BitCoin's value could plummet as users lose all confidence. This can recover, but if it's juuust bad enough to take out more miners via bankruptcy after the next hash rate adjustment, then it can sustain itself. Miners have fiat expenses and BitCoin revenue. If BitCoin drops too fast, they have to cease operations, otherwise they're literally burning piles of valuable currency to make worthless monopoly money they can't spend on anything. It all depends on how long the big miners can "hold out" while being unprofitable, or more importantly.. how long they're willing to risk losing everything they've made until then.