Resurgence of Bitcoin Mining in China: A Strategic Shift After Years of Crackdown
Background: From Dominance to Ban
Prior to 2021, China dominated Bitcoin mining, producing 65% of the world's computing power. However, a 2021 government crackdown, citing financial risks and high electricity use, led to a ban, causing a global hashrate drop as facilities relocated.
Recovery: Mining Resurgence in 2024-2025
Despite the ban, smaller mining operations have quietly resumed, making China the third-largest mining country. Hashrate Index data from 2025 shows China contributing 14% to global Bitcoin mining, with estimates suggesting up to 20%.
Drivers of Mining Growth
Mining has restarted in Xinjiang and Sichuan, leveraging surplus power and unused data center capacity. Rising Bitcoin prices since 2024 have further incentivized mining, with power-abundant regions like Xinjiang and Sichuan leading the resurgence.
- Inexpensive Power: Excess power in regions like Xinjiang and Sichuan fuels mining.
- Surplus Infrastructure: Data centers seek clients to utilize overdeveloped capacity.
- High Bitcoin Prices: Elevated prices enhance mining profitability.
China's Evolving Digital Asset Policy
China's stance is shifting from total bans to strategic acceptance of digital assets. Initiatives like Hong Kong's stablecoin framework and the advancement of the e-CNY highlight this shift, focusing on financial stability and national economic goals.