A low-profile revival is unfolding inside China’s cryptocurrency sector, where bitcoin mining — outlawed nationwide in 2021 — is making a notable comeback. Industry trackers and miners say operators are returning to energy-rich provinces to take advantage of surplus electricity and an overbuilt data-center network, enabling a resurgence that is reshaping global mining dynamics.
Fresh data from Hashrate Index shows China reclaiming significant ground in the past year. After its global market share plunged to zero following the crackdown, the country had climbed back to third place with a 14% share by the end of October. Mining rig manufacturers, particularly Canaan Inc., are also seeing sharply rising domestic sales that mirror this renewed activity.
Miners attribute the rebound to straightforward economics. In Xinjiang, where abundant energy frequently exceeds transmission capacity, operators say mining provides a profitable outlet. “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 began operating again late last year. Similar patterns are emerging in Sichuan, where former miners report acquaintances quietly restarting operations.
The broader revival coincides with bitcoin’s strong rally earlier this year, driven in part by pro-crypto policies in the United States and global concerns about the strength of the dollar. Although bitcoin has since retreated from its October highs, the recent surge sharply boosted mining profitability — encouraging dormant setups to restart.
Industry analysts say China’s situation reflects a familiar tension: strict national policy versus local economic incentives. “Chinese policy flexibility emerges when economic incentives are strong in specific regions,” observed Patrick Gruhn, CEO of Perpetuals.com, who called the renewed activity one of the most significant market signals in years. Even without an official policy reversal, the perception of a softer stance may be supporting bitcoin’s broader narrative as a resilient, globally distributed asset.
Hardware sales also tell the story. Canaan — the world’s second-largest maker of bitcoin mining machines — saw China’s share of its revenue jump from just 2.8% in 2022 to more than 30% last year. According to a source with direct knowledge, China accounted for over half of the company’s sales in the second quarter of this year. Canaan attributed its rising China numbers to U.S. tariff uncertainties, higher bitcoin prices, and shifting attitudes toward digital assets within China, while maintaining that its business remains compliant with all regulations.
The resurgence comes as Beijing signals a more nuanced approach to digital finance. Hong Kong’s stablecoin legislation, which took effect in August, is widely viewed as part of China’s broader strategy to compete with the U.S. in regulated crypto innovation. Beijing has also explored the possibility of yuan-backed stablecoins to support wider international use of its currency.
For now, China continues to insist that bitcoin mining is illegal. But blockchain analytics firm CryptoQuant estimates that 15%–20% of global mining capacity still operates inside the country — underscoring the difficulty of enforcing an outright ban. As Liu Honglin of Man Kun Law Firm puts it, profitable activities are hard to eliminate entirely: “I personally think government policies against mining will be gradually loosened, because you simply cannot stop such activities completely.”