Bitcoin’s Back in China?! 🤯

A Brief History of Chinese Bitcoin Disdain (and Return)

Before 2021, China, ah, China! It held the reins of a significant portion of the global Bitcoin (BTC) mining enterprise, practically a fiefdom of hash power. The Cambridge Bitcoin Electricity Consumption Index, a rather dryly scientific undertaking, suggests that in 2020, Chinese miners conjured approximately 65% of the world’s Bitcoin computational engine. A substantial piece of the digital pie, wouldn’t you agree?

Then came the edict, the pronouncement from on high in 2021. The Chinese government, in its infinite wisdom (or perhaps a fit of pique), decided to…discourage, shall we say, this activity. Concerns regarding financial imbroglios, the troublesome outflow of capital, and the sheer gluttony for electrical current were cited. By September of that year, all cryptocurrency transactions-an umbrella term for such frivolous pursuits-were declared illegal, and the mining ban was official. A rather dramatic curtailment, wouldn’t you say?

The consequence, as one might expect, was a delightful disruption. The global hashrate, that measure of computational might, plummeted as Chinese mining installations shuttered their doors or embarked on a grand diaspora to lands such as the United States, Kazakhstan, and, with a characteristic flourish, Russia. A bit of upheaval, a migration of digital pickaxes, if you will.

Yet, the insatiable demand for Bitcoin continued, and global electricity consumption by its miners, predictably, kept its upward trajectory. The Chinese decline was neatly offset by burgeoning activity elsewhere. From a relatively modest 89 terawatt-hours (TWh) in 2021, yearly electricity utilization escalated to a rather imposing 121.13 TWh by 2023. It seems one cannot simply suppress the digital spirit.

The Miraculous Resurrection: Circa 2024-2025

And now, the twist. Mining operations, like resilient weeds, have begun to sprout anew within the borders of China. Modest in scale, perhaps, and decidedly more understated than those sprawling farms of yesteryear, but undeniably present.

Hashrate Index data, as reported in October 2025, reveals that China now commands roughly 14% of the global Bitcoin mining landscape, placing it as the third-largest mining nation, trailing only the US and Kazakhstan. A rather respectable recovery, wouldn’t you concur? The astute analysts at CryptoQuant, however, entertain a slightly bolder estimation, placing the real share between 15% and 20%. Numbers, numbers…always a touch of ambiguity, as one often finds.

One can also observe a rather sprightly resurgence in sales from Canaan, a preeminent manufacturer of Bitcoin mining apparatus. In 2022, China accounted for a mere 2.8% of their revenue. By 2023? A substantial 30%. And whispers from industry insiders suggest that figure nudged past 50% in the second quarter of 2025. A most intriguing phenomenon, wouldn’t you say?

Did you know? Bitcoin’s network, a marvel of decentralized engineering, relies on miners engaged in a constant competition to solve cryptographic riddles. Yet, no single entity has ever held it in its iron grip for long. Its geographic peregrinations – from China to the US, onwards to Central Asia – illustrate its remarkable ability to withstand the buffets of political and economic turbulence. A testament to its peculiar, digital tenacity.

The Re-Emergence: A Matter of Pragmatism?

According to a report in Reuters, mining operations have experienced a revival in Xinjiang and Sichuan over the past two years. Xinjiang, a province rich in energy resources, has long supported such endeavors. Given that a significant portion of its surplus energy goes to waste – unable to be efficiently transmitted to the coastal metropolises – utilizing it for cryptocurrency mining presents a…rational option, wouldn’t you say?

Many inland regions of China find themselves producing electricity in excess of their immediate needs. Provinces such as Xinjiang and Sichuan, boasting an abundance of power mainly derived from coal, would otherwise see this surplus dissipated. Employing this inexpensive, or ‘stranded’ electricity to power mining machines has proven to be, you guessed it, profitable.

Local governments, furthermore, have been rather industrious in constructing vast data centers. When demand for these facilities falls short of expectations, they readily offer space and power to Bitcoin miners. Naturally. And with Bitcoin prices exhibiting a bit of upward momentum since 2024, the miners find themselves in an even more advantageous position.

A confluence of excessive data center capacity, coupled with an ascendant Bitcoin price, may have established an environment perfectly conducive to the mining renaissance. A rather convenient set of coincidences, wouldn’t you agree?

The factors driving this resurgence boil down to:

• Abundant & Underused Power: The surplus energy in places like Xinjiang and Sichuan is ideally suited for mining.
• Excess Computing Capacity: Data centers are eager to fill empty space and utilize their idle power.
• A Cooperative Bitcoin Price: Higher Bitcoin prices, partially bolstered by shifting US regulatory winds, make mining more lucrative.

This revived mining vigor is largely concentrated in regions of energy extravagance:

• Xinjiang, blessed with abundant coal and wind power, and boasting well-established industrial infrastructure.
• Sichuan, renowned for its low-cost hydropower during the monsoon season.
• Other western provinces enjoying a surfeit of energy and favorable local conditions.

Did you know? Every four years, Bitcoin undergoes a ‘halving’ – a curious event that reduces miner rewards by half. This built-in scarcity mechanism, reminiscent of gold mining, engenders major market cycles and shapes the long-term dynamics of supply. A rather elegantly engineered system, don’t you think?

China’s Evolving Relationship with the Digital Realm

China’s approach to digital assets is undergoing a subtle, yet significant, transformation. A move away from outright rejection, towards a more nuanced and, dare I say, selective acceptance. Beijing is displaying increased openness towards cautiously regulated digital asset infrastructure. The sands are shifting.

Hong Kong’s recently implemented stablecoin licensing framework, which commenced in August 2025, exemplifies this evolving attitude. Hong Kong, while technically part of China, possesses a degree of administrative autonomy. A curious arrangement, isn’t it?

On the mainland itself, authorities are exploring the potential of yuan-backed stablecoins as a means of bolstering the international usage of the renminbi, China’s official currency. Simultaneously, China is rapidly developing its central bank digital currency, the e-CNY, and integrating it into everyday transactions, cross-border pilots, and public services. A show of digital patriotism, perhaps?

These developments intimate that China’s course is veering away from blanket bans and towards controlled experimentation. Digital assets that contribute to financial stability and national economic advancement may be permitted to flourish. A rather pragmatic, if somewhat cautious, approach.