Why China’s Bitcoin mining activity is surging again after a 4-year crackdown

From dominance to ban: The 2021 crackdown

Before 2021, China controlled a ample stock of planetary Bitcoin (BTC) mining. Data from the Cambridge Bitcoin Electricity Consumption Index shows that Chinese miners produced astir 65% of the world’s Bitcoin computing powerfulness successful 2020.

In 2021, the Chinese authorities moved to halt mining activity. Authorities cited concerns astir fiscal risks, superior outflows and the precocious energy usage required for mining. In September 2021, the People’s Bank of China declared each cryptocurrency transactions amerciable and confirmed the nationwide prohibition connected mining.

The contiguous effect was a crisp driblet successful planetary hashrate arsenic galore Chinese mining facilities closed oregon moved their instrumentality to countries specified arsenic the US, Kazakhstan and Russia.

Even though China banned crypto mining, planetary energy usage by BTC miners kept rising. The diminution successful the federation was offset by accelerated maturation successful different countries. Yearly energy usage for Bitcoin mining accrued from 89 terawatt-hours (TWh) successful 2021 to astir 121.13 TWh successful 2023.

Total Bitcoin energy depletion

The 2024-2025 betterment of mining operations

Mining operations person resumed successful assorted parts of China, though they are smaller and little disposable than the ample farms that operated successful the past.

According to Hashrate Index information reported successful October 2025, China present accounts for astir 14% of planetary Bitcoin mining, making it the third-largest mining state aft the US and Kazakhstan. Analysts astatine the onchain probe steadfast CryptoQuant spell further, estimating that the existent stock of Bitcoin mining successful China is betwixt 15% and 20%.

Fast-rebounding income of rig shaper Canaan, 1 of the largest manufacturers of Bitcoin mining machines, besides constituent to a resurgence successful Bitcoin mining successful China. China accounted for lone 2.8% of Canaan’s gross successful 2022. By 2023, the fig had risen to 30%, and manufacture sources accidental it exceeded 50% successful the 2nd 4th of 2025.

Did you know? Bitcoin’s web is secured by miners competing to lick cryptographic puzzles, yet nary azygous entity has ever controlled it long-term. Geographic shifts from China to the US to Central Asia amusement its resilience against governmental and economical disruptions.

Reasons down the resurgence of mining operations successful China

According to a Reuters report, mining operations person restarted successful Xinjiang and Sichuan implicit the past 2 years oregon so. Xinjiang is an energy-abundant state that has supported mining activity. Since overmuch of its surplus vigor cannot beryllium transmitted retired of the region, it is often utilized for crypto mining.

Many inland regions of China nutrient much energy than they tin efficiently transmit to coastal cities. In provinces specified arsenic Xinjiang and Sichuan, surplus powerfulness drawn chiefly from ember would different spell unused. Using this low-cost oregon stranded energy to tally mining machines has go a profitable option.

Local governments person besides built ample information centers successful caller years. When regular request for these facilities is little than expected, owners tin rent abstraction and powerfulness to Bitcoin miners. Rising Bitcoin prices since 2024 person further boosted the profits of these miners.

Excessive information halfway capableness combined with rising Bitcoin prices whitethorn person created an optimal situation for the resurgence of cryptocurrency mining.

The underlying factors down the summation successful Bitcoin mining enactment see the following:

• Availability of inexpensive oregon underutilized power: When provinces specified arsenic Xinjiang and Sichuan person much than capable power, the surplus tin beryllium utilized for mining.

• Surplus computing infrastructure: Overdeveloped information halfway facilities are actively seeking clients to marque usage of their capacity.

• Elevated Bitcoin terms environment: A precocious Bitcoin price, supported successful portion by favorable cryptocurrency argumentation changes successful the US, improves mining profitability.

The resurgent mining enactment is concentrated successful power-abundant regions:

• Xinjiang with plentiful ember and upwind power, on with established concern facilities.

• Sichuan, known for low-cost hydropower during the rainy season.

• Other occidental provinces with surplus vigor and favorable section conditions.

Did you know? Every 4 years, Bitcoin undergoes a halving that cuts miner rewards by 50%. This built-in scarcity mechanics mimics golden extraction and often triggers large marketplace cycles portion shaping semipermanent proviso dynamics.

Changing cognition of China toward integer assets

China’s argumentation toward integer assets is moving distant from outright rejection and shifting toward selective, strategical acceptance. Beijing is showing greater openness to cautiously regulated integer plus infrastructure.

Hong Kong’s stablecoin licensing framework, which took effect successful August 2025, reflects this broader approach. Hong Kong is portion of China, though designated arsenic a Special Administrative Region.

On the mainland, authorities are exploring yuan-backed stablecoins arsenic a mode to summation the planetary usage of the renminbi, China’s currency. China is besides rapidly advancing its cardinal slope integer currency, the e-CNY, and integrating it into nationalist services, cross-border aviator programs and mundane retail payments.

These developments amusement that China’s attack is shifting from broad bans to controlled experimentation. Digital assets that enactment fiscal stableness and beforehand nationalist economical goals whitethorn beryllium allowed to operate.