Cheap electricity, excess data-center capacity, and quiet policy shifts are fueling a massive underground resurgence that now accounts for up to 20% of global mining
MARKET INSIDER – Bitcoin mining is experiencing an unexpected revival in China, four years after Beijing outlawed the industry in a sweeping 2021 crackdown that aimed to protect financial stability and curb energy consumption. Despite the ban, miners—from small private operators to corporate-backed farms—are quietly rebuilding operations in energy-rich regions, pushing China back into the world’s top three bitcoin-mining hubs.
According to Hashrate Index data reviewed by Reuters, China’s share of global bitcoin mining has surged back to 14% as of October, after having fallen to effectively zero immediately after the ban. Some analysts now estimate China could be responsible for 15%–20% of the world’s total bitcoin mining capacity.
How an Industry Banned on Paper Returned in Practice
Several forces are driving the rebound. First, miners are taking advantage of ultra-cheap excess electricity in regions like Xinjiang and Sichuan, where local grids often produce more power than they can transmit. “A lot of energy cannot be transmitted out of Xinjiang, so you consume it in the form of crypto mining,” said Wang, a private miner who restarted operations last year.
Second, a data-center construction boom triggered by provincial governments left behind unused infrastructure—creating ideal conditions for clandestine or semi-tolerated mining.
Third, bitcoin’s record highs in October, boosted by President Donald Trump’s pro-crypto stance and weakening global trust in the dollar, made mining significantly more profitable. Even after dropping a third from its peak, bitcoin remains lucrative enough to justify operating in regulatory gray zones.
China Hasn’t Officially Lifted the Ban—But Behavior Says Otherwise
Beijing’s 2021 ban forced miners to flee to North America and Central Asia. Yet today, the revival is being aided—indirectly—by what analysts call regulatory flexibility driven by economic incentives.
“The resurgence of mining activity in China is one of the most important signals the market has seen in years,” said Patrick Gruhn of Perpetuals.com. Even hints of policy easing, he argues, strengthen bitcoin’s reputation as a “global, state-resilient asset.”
China’s official stance has not changed. Both the National Development and Reform Commission and Xinjiang authorities declined to comment. But recent moves suggest a softer posture toward digital assets:
- Hong Kong’s stablecoin law took effect in August, positioning the city as a regulated crypto hub.
- Beijing has considered yuan-backed stablecoins to expand the currency’s global use.
- AI and blockchain technologies are now framed as strategic priorities.
Rig Makers Confirm the Rebound
Nothing illustrates the comeback more clearly than the numbers coming from mining-rig manufacturers. Canaan, one of the world’s largest makers of bitcoin mining machines, saw China’s share of its global revenue jump from 2.8% in 2022 to 30.3% in 2023, and to over 50% in Q2 2025, according to sources with direct knowledge.
The company cited U.S. tariff uncertainty, rising bitcoin prices, and “a subtle shift” in China’s digital-asset posture as factors driving domestic sales.
A Ban That Cannot Kill a Profitable Business
“Bitcoin mining is still officially banned in China. However, there continues to be significant capacity operating,” said Julio Moreno of CryptoQuant.
Legal experts say the economics are simply too compelling. “Government policies against mining will be gradually loosened because you cannot stop such activities completely,” noted Liu Honglin of Man Kun Law Firm.
China’s bitcoin-mining resurgence signals more than a policy loophole—it underscores how unstoppable economic incentives can reshape even the world’s toughest regulatory bans. For global crypto markets, Chinese miners are once again becoming a force that cannot be ignored.
