China Quietly Reclaims 14% of Global Bitcoin Hashrate as Mining Resumes Underground

Bitcoin mining is making an unexpected comeback in China four years after the government outlawed the practice. Individual and corporate miners are returning to regions with cheap, abundant electricity and expanding data center infrastructure, as reported by Reuters.

Before the 2021 crackdown—which targeted both crypto trading and mining over concerns about financial stability and energy usage—China dominated global bitcoin mining. After its share dropped to zero immediately following the ban, China has now climbed back to third place with a 14% global market share as of the end of October, per data from Hashrate Index.

Rig manufacturer Canaan Inc has also reported rapidly recovering sales in China, supporting evidence of a mining resurgence. The renewed mining activity could strengthen demand and price support for bitcoin, the world’s largest cryptocurrency.

Cheap Electricity and Local Opportunities Fuel the Comeback

Wang, a private miner based in Xinjiang, said he resumed mining late last year in the province’s energy-rich environment.

“A lot of energy cannot be transmitted out of Xinjiang, so you consume it in the form of crypto mining,” Wang said. “New mining projects are under construction. What I can say is that people mine where electricity is cheap.”

China’s National Development and Reform Commission, which issued the mining ban in 2021, and Xinjiang’s local government did not respond to Reuters’ requests for comment.

Mining Resurgence Aligns With Bitcoin’s Price Boom

The mining revival comes as bitcoin hit record highs in October, supported by President Donald Trump’s pro-crypto policies and rising global skepticism toward the U.S. dollar. Higher bitcoin prices also improve mining profitability.

Still, the cryptocurrency has fallen about one-third since its October peak as broader market risk appetite weakens.

Patrick Gruhn, CEO of Perpetuals.com, said China’s behavior follows a familiar economic pattern. “Chinese policy flexibility emerges when economic incentives are strong in specific regions,” Gruhn said. “The resurgence of mining activity in China is one of the most important signals the market has seen in years.”

He added that although Beijing has not formally eased its restrictions: “Even hints of China’s policy easing could act as a tailwind for bitcoin’s narrative as a global, state-resilient asset.”

Mining Activity Concentrates in Power-Rich Regions

Miners and hardware manufacturers say activity remains concentrated in electricity-abundant areas, especially Xinjiang and Sichuan.

Duke Huang, a Sichuan-based former miner, said the current environment has drawn some operators back: “It’s a sensitive area … But people who get cheap electricity are still mining.”

Sources also point to an oversupply of electricity and computing power caused by over-investment in local data centers—especially in financially stressed provinces.

Mining Rig Sales Reveal a Surge in Domestic Demand

Sales figures from Canaan reflect the trend. According to company filings, 30.3% of Canaan’s global revenue came from China last year, up sharply from just 2.8% in 2022 following the crackdown.

A source with direct knowledge said China’s contribution exceeded 50% of sales in Q2 this year. While Canaan declined to confirm that breakdown, the company said its rising China revenues stem from U.S. tariff uncertainty, higher bitcoin prices, and shifting sentiment toward digital assets.

The Singapore-based firm stated: “In China, the R&D, manufacturing, and sale of mining machines are permitted.”

Canaan emphasized that its operations remain compliant with Chinese regulations and declined to comment on mining policy.

Signs of a Softer Regulatory Posture Toward Digital Assets

China appears to be gradually adjusting its stance toward digital currencies, which were once viewed as threats to capital controls and fiat stability.

Examples include Hong Kong’s new stablecoin law, which took effect in August to help the city compete with the U.S. in regulated stablecoin markets. Beijing also reported consideration of yuan-backed stablecoins to expand global RMB use, as per Reuters.

Despite the official ban, mining activity persists.

“Bitcoin mining is still officially banned in China. However, there continues to be significant capacity operating,” said Julio Moreno, head of research at CryptoQuant.

CryptoQuant estimates that 15%–20% of global bitcoin mining capacity currently operates in China.

Liu Honglin, founder of Man Kun Law Firm, echoed the idea that enforcement remains imperfect: “I personally think government policies against mining will be gradually loosened, because you simply cannot stop such activities completely.”