China now holds about 14% of the global bitcoin hashrate, a stark rebound from zero after the 2021 crackdown. This resurgence highlights how miners adapt to regulations in the cefi landscape. Rising prices further encourage this activity.
The 2021 Crackdown and Initial Impact
Beijing enforced a nationwide on bitcoin mining in 2021, citing energy concerns and financial risks. This led to a mass exodus of operations to North America and Central Asia.
China's hashrate share plummeted to nearly zero by late 2021. The move aimed to curb speculative cefi activities amid broader market regulations.
Yet, global bitcoin electricity consumption rose from 89 terawatt-hours in 2021 to 121 terawatt-hours in 2023. Other regions filled the gap created by China's exit.
Factors Driving the Mining Resurgence
Cheap electricity in provinces like Xinjiang and Sichuan powers the comeback. Miners exploit rates under $0.03 per kilowatt-hour to sustain operations.
According to Reuters, a Xinjiang miner restarted activities last year due to abundant energy. This reflects how local incentives override national regulations.
Excess data center capacity from over-investment aids miners. Cash-strapped governments built facilities that now host disguised mining rigs.
A source from a mining rig manufacturer noted,
People mine where electricity is cheap.
This underscores economic logic in the cefi market.
Rising bitcoin prices also fuel the surge. The cryptocurrency hit records in October 2025, boosting profitability despite recent dips.
Canaan, a major mining equipment maker, reported 30.3% of 2024 revenues from China, up from 2.8% in 2022. Sales exceeded 50% in Q2 2025.
The company attributes this to U.S. tariff uncertainties disrupting exports. Such shifts highlight global market interconnections in cefi.
Subtle policy changes signal tolerance. While the persists, enforcement varies, allowing underground ops in energy-rich areas.
According to Hashrate Index, China's hashrate reached 145 exahashes per second by October 2025. This places it third globally behind the U.S. and Russia.
Analysts at CryptoQuant estimate the true share at 15-20%. Discrepancies arise from off-grid and hidden facilities.
market and Regulatory Implications
This resurgence centralizes global hashrate, with the top three nations controlling over two-thirds. It raises concerns about network security in volatile markets.
In the cefi sector, increased mining supports bitcoin demand and stability. Yet, it pressures margins amid low hashprices and high difficulty.
regulation remains key; Beijing tests stablecoins in Hong Kong as a sandbox. This could influence mainland cefi policies without full reversal.
Experts like Patrick Gruhn of Perpetuals.com view this as a tailwind for bitcoin. It positions the asset amid Sino-U.S. rivalries.
Recent discussions on X emphasize the underground nature of this revival. Miners leverage unused infrastructure to evade detection.
According to AMBCrypto, over-investment in data centers by local governments spurred the rebound. This ties into broader market trends.
The mining revival demonstrates crypto's resilience against regulations. It offers lessons for cefi participants navigating uncertain markets.
bitcoin's halving cycles and scarcity mechanics amplify these dynamics. Investors should track hashrate distributions for actionable insights.
Future Outlook for China's Role
Enforcement risks persist, with potential raids disrupting operations. Energy shortages could further complicate the landscape.
Yet, strategic interests may soften stances. RMB-backed stablecoins could emerge as tools for yuan internationalization in cefi.
Global miners must adapt to this shift. Diversification reduces risks from concentration in key regions.
This development shows market forces often outpace regulations in the crypto space. It emphasizes monitoring cefi trends for informed decisions.
