China's Bitcoin Mining Sector Resurfaces: From 65% Dominance to Silent Recovery in 2025

The comeback is happening quietly. After 2021’s sweeping ban that eliminated China from the global Bitcoin mining map, the world’s second-largest economy is reclaiming its position as a significant player in the industry—though far more discreetly this time.

The Scale of Return: Numbers Tell the Story

Fast forward to October 2025, and China now represents approximately 14% of global Bitcoin mining capacity, trailing only the United States and Kazakhstan. Some estimates from industry observers suggest the actual figure could hover between 15% to 20%, indicating measurement challenges in tracking decentralized operations.

This represents a stunning reversal from just years earlier. Before the 2021 crackdown, China controlled roughly 65% of the world’s Bitcoin hashing power—an extraordinary concentration that the Cambridge Bitcoin Electricity Consumption Index documented in 2020. The government’s regulatory hammer came hard: in September 2021, authorities officially prohibited all cryptocurrency transactions nationwide, forcing miners to pack up equipment and relocate to jurisdictions like the United States, Kazakhstan, and Russia.

The exodus was immediate and visible in the chain data. Global Bitcoin mining’s hash rate plummeted as operations ceased or relocated. Yet the story doesn’t end there—and that’s the puzzle worth examining.

Why Energy Economics Favor Mining Revival

The resurgence isn’t random. It’s deeply rooted in regional energy economics, particularly in two provinces that have become the epicenters of this quiet recovery: Xinjiang and Sichuan.

Xinjiang’s Energy Surplus: This northwestern region sits atop vast coal reserves and enjoys substantial wind power generation. The critical detail: Xinjiang produces more electricity than it can physically transmit to coastal metropolitan areas. This transmission bottleneck creates a glut of power that would otherwise go unused. Enter Bitcoin miners—they’ve become the perfect customer for otherwise wasted electrons.

Sichuan’s Hydroelectric Advantage: During China’s rainy seasons, Sichuan’s hydroelectric facilities generate abundant low-cost power. Mining operations align perfectly with this seasonal surplus, providing revenue for power infrastructure during low-demand periods.

Beyond raw power availability, local governments have invested heavily in data center infrastructure. These facilities, often operating below capacity, now double as mining hosting environments during periods of weak demand from traditional tech services.

The Profitability Catalyst

Here’s what changed recently: Bitcoin’s price trajectory. As BTC trades around $95.45K—substantially higher than the 2021 levels when China’s ban occurred—mining economics have shifted dramatically. The improved price environment makes even moderately efficient operations profitable again, especially when operating on nearly-free surplus electricity.

The 2024-2025 period also coincided with favorable geopolitical shifts affecting crypto policy globally. These macro conditions, combined with local energy advantages, created a perfect window for mining’s return.

Measuring the Resurgence: Hardware Demand as Proof

One reliable indicator: mining hardware sales. Canaan, China’s premier manufacturer of Bitcoin mining equipment, provides an illuminating case study. In 2022, domestic Chinese revenue accounted for merely 2.8% of the company’s total sales. By 2023, this jumped to over 30%. Industry sources tracking 2025 data estimate the figure surpassed 50% in Q2 alone.

Such dramatic acceleration in domestic hardware demand signals real operational activity, not mere speculation.

The Halving Cycle: Mining’s Structural Challenge Ahead

It’s worth noting that Bitcoin’s architecture includes a built-in dynamic: the halving event occurring every four years. The next halving will reduce miner rewards by 50%, fundamentally altering profitability equations. This cyclical pressure tests the resilience of mining operations and typically triggers industry consolidation.

Despite these structural challenges, global Bitcoin mining electricity consumption tells a different story. In 2021, the sector consumed roughly 89 terawatt-hours (TWh) of power. By 2023, this climbed to approximately 121.13 TWh—a 36% increase despite China’s absence. The industry expanded elsewhere and proved remarkably adaptive.

What This Means Going Forward

China’s mining comeback represents neither a triumphant return to 2020 levels nor a regulatory victory for Beijing. Instead, it reflects market reality: where cheap energy and hardware exist, mining activity will find a way to operate. The 2021 ban didn’t destroy the industry—it merely redistributed it globally. Now, improved economics and surplus capacity are pulling operations back to their original strongholds, operating in the margins and shadows rather than the spotlight.

The resilience of Bitcoin’s network, combined with the relentless physics of energy economics, appears to be outweighing regulatory constraints. China’s miners are back—just counting differently now.