China’s role in global bitcoin mining is undergoing an unexpected revival, four years after authorities imposed a sweeping ban on the industry.
Fresh data and accounts from miners suggest that operations are expanding in several energy-rich regions, reviving the country’s influence in an industry it once dominated.
Before the 2021 crackdown, China controlled the largest share of global bitcoin mining.
Authorities cited financial risk and energy consumption concerns when ordering operations to halt, pushing miners overseas and appearing to eliminate all domestic capacity.
Rising Market Share Signals New Momentum
Despite the ban, China’s estimated share of global bitcoin mining reached 14% by the end of October, according to Hashrate Index.
This placed the country back in third position globally, marking a significant shift from the near-zero levels recorded immediately after the crackdown.
The resurgence has been supported by rising demand for mining rigs.
Canaan Inc, one of the world’s largest mining machine manufacturers, has reported strong sales from China, pointing to renewed confidence in the sector.
Wang, a private miner in Xinjiang, said he returned to mining late last year due to abundant local power.
“A lot of energy cannot be transmitted out of Xinjiang, so you consume it in the form of crypto mining,” he said.
“New mining projects are under construction. What I can say is that people mine where electricity is cheap.”
Officials from the National Development and Reform Commission and Xinjiang authorities did not respond to requests for comment.
Economic Incentives Drive the Rebound
China’s renewed mining activity coincides with bitcoin reaching record highs in October.
The surge came as investors responded to President Donald Trump’s pro-crypto stance and growing skepticism toward the U.S. dollar.
Bitcoin has since fallen by roughly a third as global risk appetite weakened.
Still, favourable conditions in parts of China have encouraged miners to resume operations.
“Chinese policy flexibility emerges when economic incentives are strong in specific regions,” said Patrick Gruhn, CEO of Perpetuals.com.
“The resurgence of mining activity in China is one of the most important signals the market has seen in years.”
Mining remains particularly active in provinces with excess power generation such as Xinjiang.
Some former miners in Sichuan say interest is also rising again.
Sichuan-based Duke Huang, who left the industry after the ban, said several acquaintances have returned.
“It’s a sensitive area … But people who get cheap electricity are still mining,” he said.
Industry sources say over-investment in local data centres has left several regions oversupplied with electricity and computing resources, further incentivising miners.
Industry Data Shows Strong Domestic Equipment Demand
Canaan generated 30.3% of its global revenue from China last year, a sharp rise from 2.8% in 2022 following the crackdown.
A source familiar with the matter said China accounted for more than half of Canaan’s sales in the second quarter of this year.
The company said factors such as rising bitcoin prices, U.S. tariff uncertainty and shifts in China’s digital asset outlook contributed to stronger domestic demand.
“In China, the R&D, manufacturing, and sale of mining machines are permitted,” the company said in a statement.
Signs of a Softer Policy Approach
While mining remains officially banned, recent developments suggest China is reassessing aspects of its digital asset policy.
Hong Kong introduced a stablecoin regulatory framework in August, aiming to position itself as a major global centre for fiat-backed digital currencies.
China has also explored yuan-backed stablecoins to expand international use of its currency.
“Bitcoin mining is still officially banned in China. However, there continues to be significant capacity operating,” said Julio Moreno of CryptoQuant.
CryptoQuant estimates that 15%–20% of global mining capacity currently operates in China.
Legal experts say economic incentives could eventually lead to regulatory adjustment.
“I personally think government policies against mining will be gradually loosened, because you simply cannot stop such activities completely,” said Liu Honglin of Man Kun Law Firm.
