Bitcoin Mining Makes Quiet Comeback in China Despite Ban

China, once the global hub of bitcoin mining, is witnessing a subtle yet notable resurgence in the cryptocurrency’s mining activities, four years after a sweeping government ban. Despite Beijing’s 2021 crackdown citing energy conservation and financial stability concerns, miners are finding ways to exploit abundant electricity in certain provinces, reigniting the industry quietly.

The resurgence is most pronounced in regions like Xinjiang and Sichuan, where energy production exceeds local demand. “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 operating in the energy-rich province. New mining projects are underway, largely driven by the lure of cheap electricity and improved profit margins amid rising bitcoin prices.

China’s global share of bitcoin mining, which plummeted to near zero after the ban, has now climbed back to around 14%, positioning the country as the third-largest contributor to global mining. This revival is reflected in sales growth for local mining rig manufacturers like Canaan Inc., which reported a significant increase in China-based revenues compared to the post-crackdown period.

The underlying factors fueling this comeback include over-investment in data centers, abundant local electricity, and continued profitability from bitcoin. Many miners who exited China for overseas markets have quietly returned, driven by regional advantages. Despite the official ban remaining in place, the activity continues largely in under-the-radar operations, signaling a complex balancing act between regulation and economic incentives.

Analysts note that China’s softening approach towards digital assets, including discussions around yuan-backed stablecoins and Hong Kong’s new regulatory frameworks, may be indirectly supporting mining resurgence. While policy restrictions remain, the market appears resilient, and mining remains a profitable venture for those with access to low-cost power.

As bitcoin continues to face volatility in global markets, the quiet comeback of Chinese miners adds an unexpected layer to the cryptocurrency’s evolving narrative, underscoring the ongoing tension between regulatory control and economic opportunity.