Bitcoin Mining Rebounds in China Despite 2021 Ban

Bitcoin mining is staging a quiet comeback in China four years after being officially banned, with the country reclaiming its position as the world’s third-largest mining hub. Industry data reveals China now commands 14% of global Bitcoin mining activity, defying the 2021 crackdown that had reduced its share to zero.

Underground Mining Operations Expand

Private miners in energy-abundant provinces like Xinjiang are driving the resurgence. “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 started operations late last year. He noted that new mining projects continue construction despite the official ban.

“New mining projects are under construction. What I can say is that people mine where electricity is cheap.” – Wang, Xinjiang-based miner

Mining Equipment Sales Surge

Canaan Inc, the world’s second-largest Bitcoin mining machine manufacturer, saw its China revenue share explode from 2.8% in 2022 to over 50% in Q2 2024. The company attributed this growth to rising Bitcoin prices, US tariff uncertainties, and a subtle shift in China’s digital asset posture.

While mining remains officially banned, Canaan clarified that “the R&D, manufacturing, and sale of mining machines are permitted” in China.

Policy Flexibility Amid Economic Realities

Industry experts observe that Chinese authorities appear to be turning a blind eye to profitable mining operations. Patrick Gruhn, CEO of Perpetuals.com, noted: “Chinese policy flexibility emerges when economic incentives are strong in specific regions. The resurgence of mining activity in China is one of the most important signals the market has seen in years.”

The trend coincides with China’s broader softening stance toward digital assets. Hong Kong implemented stablecoin regulations in August, while Beijing considers yuan-backed stablecoins to boost currency adoption.

Significant Underground Capacity

Blockchain analytics firm CryptoQuant estimates 15-20% of global Bitcoin mining capacity currently operates in China. Julio Moreno, head of research at CryptoQuant, confirmed: “Bitcoin mining is still officially banned in China. However, there continues to be significant capacity operating.”

Legal experts predict further policy relaxation. Liu Honglin, founder of Man Kun Law Firm, stated: “I personally think government policies against mining will be gradually loosened, because you simply cannot stop such activities completely.”

The mining rebound demonstrates how economic realities often override official policies, with cheap electricity and profitable opportunities driving underground operations in China’s energy-rich hinterlands.