China’s Bitcoin Mining Quietly Surges Despite Ban

• Bitcoin Mining in China is growing again at an alarming rate.
• Rising BTC price encouraged miners to restart operations across energy-rich provinces.
• Mining rig maker Canaan reports strong revenue rebound driven by the expanding underground Bitcoin mining activity.

 Bitcoin mining in China is rising again, even after a countrywide ban in 2021. This revival puts China again in the list of the top mining regions in the world, after several years of being almost absent.

Bitcoin Mining Keeps Growing Secretly

According to a Reuters report, new statistics and industry reactions show that mining activity in various provinces increased rapidly. This has been driven by cheap power and available computing power.

China banned cryptocurrency trading and mining four years ago, which reduced its contribution to global Bitcoin mining to zero. Now, the country has quietly regained the third-largest mining share worldwide with a 14% slice of the market, according to Hashrate Index.

This information indicates renewed activity by individuals and companies searching for cheap sources of energy. Miners have moved into energy-rich regions where electricity supply outpaces demand. A private miner in Xinjiang said they resumed operations last year because unused power made mining attractive again. 

Also Read | Bitfarms Drops 18% After Plan to End Bitcoin Mining

Bitcoin Gains Cause Rebound in Mining Operations

The increase in mining was accompanied by an increase in BTC price before it dropped from its all-time high. The asset reached unprecedented highs in October, following pro-crypto policies under President Trump and concerns in the global market over the U.S. dollar.

An appreciation in the price of Bitcoin boosted the mining profit, which caused operators to resume operations or increase their capacity. The rising mining operations is considered by analysts as the definite indication that rules towards digital assets are changing.

The Chinese government has not officially revealed that it has lifted the ban. But the trend shows that there is laxity in enforcement in some areas, suggesting that rules on crypto could be softening in the country.

Renewed Mining Activity Is Causing High Demand for Equipment

Those who manufacture rigs are also benefiting from the increase in Bitcoin mining volume. Miner-rig producer Canaan registered a high increase in sales of its equipment in China after the national ban caused a crash in sales. According to the company’s filing, China generated more than 30% of its revenues last year, compared to the less than 3% as it had contributed since the ban started.

Analysts suggest that up to 20% of the world’s Bitcoin mining capacity is currently in China. In addition, researchers argue that the industry is very profitable, so it will not be easy to put it out of business entirely. Some lawyers even argue that authorities will soften restrictions as China adjusts to new economic prospects.

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