China's Bitcoin Mining Resurgence Post-Crackdown Raises Concerns

China's Bitcoin mining activity has surged again after a four-year crackdown that began in 2021. According to the Cambridge Bitcoin Electricity Consumption Index, Chinese miners produced about sixty-five percent of the world's Bitcoin computing power in 2020.

However, the Chinese government declared all cryptocurrency transactions illegal in September 2021, leading to a sharp decline in global hashrate as many mining facilities shut down or relocated to countries such as the United States, Kazakhstan, and Russia.

Despite the ban, global electricity use by Bitcoin miners continued to rise, increasing from eighty-nine terawatt-hours in 2021 to about one hundred twenty-one point thirteen terawatt-hours in 2023. By October 2025, data from Hashrate Index indicated that China accounted for about fourteen percent of global Bitcoin mining, making it the third-largest mining country after the U.S. and Kazakhstan.

Analysts from the on-chain research firm CryptoQuant estimate the real share of Bitcoin mining in China could be between fifteen and twenty percent. The recovery of mining operations can be attributed to various factors including the availability of inexpensive or underutilized power in regions like Xinjiang and Sichuan, which have surplus energy predominantly from coal and hydropower, respectively.

The resurgence is also linked to the fast-rebounding sales of Canaan, one of the largest manufacturers of Bitcoin mining machines, which saw its revenue from China rise from two point eight percent in 2022 to thirty percent in 2023, and reportedly exceeded fifty percent in the second quarter of 2025.

Local governments have constructed large data centers in these areas, which can rent space and power to Bitcoin miners when regular demand is low. The combination of excess data center capacity and rising Bitcoin prices since 2024 has created an optimal environment for mining.

Elevated Bitcoin prices, influenced by favorable cryptocurrency policies in the U.S., have further improved mining profitability. This resurgence raises significant concerns regarding regulatory compliance and environmental impacts, particularly as China ramps up its mining activities in energy-abundant regions.

The implications for global Bitcoin supply and market dynamics could be profound as the mining landscape continues to evolve following the crackdown.