Bitcoin Mining Resurgence in China Despite Government Ban

Key Points:

Bitcoin BTC +1.13% mining in China has resurged despite a government ban since 2021.
Economic incentives, unused energy, and policy shifts are factors driving this trend.
China is now the third-largest global player in Bitcoin mining.

Bitcoin mining is resurging in China, now contributing 14% of the global hash rate despite a government ban, driven by economic incentives and policy shifts.

This development affects Bitcoin pricing, market dynamics, and mining geography, with potential regulatory responses still unclear.

Bitcoin Mining Resurgence in China Despite Government Ban

Bitcoin mining has resurged in China, now the third-largest globally, despite a government ban since 2021. The increase is attributed to economic incentives, unused energy, and subtle policy shifts.

Individual and corporate miners, particularly in Xinjiang and Sichuan, where cheap electricity is abundant, are leading this resurgence. A miner stated that surplus energy is consumed through mining activities.

Canaan Inc., a major mining rig manufacturer, reported a surge in domestic sales due to favoring local markets amid U.S. tariff risks. Bitcoin’s price has been indirectly supported by China’s growing mining capacity.

The National Development and Reform Commission has yet to comment on the revival, suggesting passive tolerance rather than active regulation. Some experts see this as a significant market signal.

Despite regulatory ambiguity, miners exhibit confidence, viewing the government’s stance as an opportunity for growth. Canaan Inc.’s operations illustrate this reconciliation of policy and economic needs.

Potential outcomes include increased Bitcoin market stability as hashpower shifts back to pre-ban levels. Historical patterns show China’s mining industry resilience, potentially influencing global hashrate distribution.