China’s Quiet Bitcoin Mining Comeback — What the 14% Share Means for Global Crypto Dynamics

Key Takeaways :

• China has regained roughly 14% of the global Bitcoin mining hash-rate, positioning it as the world’s third-largest mining hub as of October 2025.
• The resurgence is being driven by cheap electricity and surplus data-center capacity in energy-rich regions such as Xinjiang and Sichuan, where underground mining operations have quietly resumed.
• Domestic demand for mining rigs — led by manufacturers like Canaan Inc. — has sharply increased, signaling that mining hardware sales in China have surged, even though official bans remain.
• Despite the revival, miners face headwinds: globally, the “hashprice” — i.e., the revenue per unit of hash power — has recently hit record lows, pressured by falling cryptocurrency prices, low transaction fees, and elevated network difficulty.
• The duality of a formal ban and a de facto toleration in certain regions suggests that economic incentives may be prompting a gradual, region-by-region softening of regulatory enforcement — a development with broad implications for the global crypto ecosystem.

1. The Background: From Banishment to Comeback

In 2021, the Chinese government imposed a sweeping ban on cryptocurrency trading and mining, citing risks to financial stability and concerns over energy consumption. Up until then, China had been the undisputed leader in global cryptocurrency mining. The ban forced most mining operations to relocate overseas — primarily to regions in North America and Central Asia — and pushed China’s share of global Bitcoin hash-rate essentially to zero.

Fast forward to October 2025: data from the industry-tracking organization Hashrate Index reveals that China now accounts for approximately 14% of global Bitcoin mining capacity. This repositions China firmly as the world’s third-largest Bitcoin mining hub, trailing only the United States and (depending on dataset) a country like Kazakhstan or Russia.

This “comeback” is notable not just for its magnitude — climbing from near-zero to double-digit share — but also for what it signals about the resilience and adaptability of mining operations.

2. What’s Fueling the Revival: Cheap Power, Excess Capacity, Underground Operations

2.1 Conventional Constraints vs Economic Realities

While the nationwide ban remains in effect, enforcement appears uneven. On the ground in regions with abundant power supply — especially Xinjiang and Sichuan — miners have quietly restarted operations. The driving factor is a simple economic calculus: electricity in these regions is cheap, and local grids have surplus capacity that cannot easily be transmitted out, providing a cost-effective basis for energy-intensive mining. As one private miner from Xinjiang reportedly put it: “A lot of energy cannot be transmitted out of Xinjiang, so you consume it in the form of crypto mining.”

At the same time, many previously underutilized or idle data centers — built during China’s earlier mining boom — are now being repurposed to support mining rigs, offering both electricity and infrastructure (cooling, networking) that make mining feasible once again.

2.2 Hardware Demand Reflects Revival

The hardware side of the equation reinforces the revival narrative. Leading mining-rig manufacturer Canaan Inc. has reportedly seen its Chinese sales jump sharply: their domestic sales now reportedly account for more than 50% of their quarterly revenue — a remarkable shift from just 2.8% in 2022.

This indicates that not only individual hobbyists but also more organized and possibly corporate-scale miners are investing in mining infrastructure within China — a strong signal that mining is not just sporadic but growing in scale.

2.3 Underground, but Growing

Because mining remains officially banned, much of this activity appears to be underground — unreported, decentralized, and localized. But the fact that multiple independent sources, rig sales data, and hashrate analyses converge on similar estimates (14% share, possibly 15–20% of global capacity) suggests this is not a minor sideline, but a significant revival.

3. Challenges Ahead: Hashprice Drop, Network Difficulty, Regulatory Risk

The revival, however, is not without its headwinds. According to recent reports, the so-called “hashprice” — a key indicator of mining profitability representing expected revenue per unit of hash power — recently plunged to a record low.

Why? Several factors:

• Bitcoin (BTC) price volatility: Bitcoin experienced a strong rally toward the end of October, attracting renewed investor interest. But as of late November, prices have corrected significantly.
• Low transaction fees: With fewer high-fee transactions on the blockchain, miners derive less income from transaction fees, which are a growing portion of mining revenue as block rewards decline over time.
• High network difficulty: As global hash-rate recovers — partly driven by the resurgence in China — the mining difficulty rises accordingly, meaning miners must expend more computational power (and electricity) to produce the same output. This erodes profitability, especially for miners operating on thin margins or relying on older/less efficient hardware.

This combination of increasing costs and decreasing income creates a challenging environment: whether the revived mining activity can remain profitable — especially if BTC price weakens further — remains uncertain.

Moreover, the regulatory backdrop is still officially hostile: the 2021 ban remains on the books, and there has been no formal amnesty or legalization of mining. As such, miners are operating in a gray/underground zone — at risk if enforcement policies suddenly tighten.

4. Why This Matters — For Investors, Developers, and the Global Crypto Ecosystem

4.1 Implications for Bitcoin Supply, Security, and Network Decentralization

The return of China as a major Bitcoin mining hub has important implications for the overall health and security of the network. More mining capacity — especially from a previously dominant region — can strengthen the hash-rate backbone of the network, improving resistance against attacks and increasing transaction processing capacity and resilience.

However, the concentration of mining in certain regions (Xinjiang, Sichuan, etc.), especially when done underground, raises concerns about geographical centralization. If a few regions or even a few large operators dominate a substantial portion of hash-rate, this could reduce the resilience benefits of decentralization and create systemic risks (e.g., local power disruptions, regulatory crackdowns).

For investors in BTC or mining equipment, this revival might signal that BTC supply and security are likely to remain robust in the near-to-mid-term, potentially supporting price stability or upside.

4.2 Signals for Crypto-Infrastructure Developers and VASP Operators

For developers, institutional VASPs (virtual asset service providers), and companies building blockchain infrastructure — including stablecoin operations, custody services, or block-production businesses — China’s partial and underground tolerance of mining suggests several strategic implications:

• Continued mining activity in China may attract foreign interest in mining equipment, hosting, or “colocation” services — especially if miners seek to hide operations from authorities.
• A hash-rate rebound can support BTC network stability, which is beneficial for services built on BTC (custody, lending, settlement, cross-border remittance). For a VASP in the Philippines (as in your case), this can improve confidence in BTC as a core asset.
• However, regulatory uncertainty remains. The fact that mining is “officially prohibited but tolerated in practice” means that any change in enforcement posture — on either central or local government level — could disrupt operations, supply, and network stability.

4.3 Broader Market and Policy Signals — Has China’s Stance Softened?

The revival appears to coincide with signs of a broader shift in China’s attitude toward digital assets. For example:

• Some Chinese mining-rig manufacturers report surging domestic sales.
• There is growing discussion around stablecoins, including in regions like Hong Kong, where stablecoin regulation is evolving this year.
• The economic incentives appear to be strong enough that, in many cases, local enforcement seems tolerant or inattentive — especially in power-rich, remote areas.

Taken together, these suggest that China may be quietly recalibrating its stance toward crypto: not with an official lifting of the ban, but with a form of localized permissiveness — effectively allowing mining where it economically makes sense and where enforcement is difficult or non-prioritized.

For global crypto markets, this is a signal that regulatory risk in China — long considered the most severe in major economies — might be gradually easing, at least at the enforcement level. That could benefit global BTC demand, infrastructure investment, and long-term network growth.

5. What This Means for Crypto Investors and Practitioners — Opportunities and Cautions

For the audience of crypto investors, blockchain developers, and VASP operators, several implications and strategic takeaways emerge from China’s mining revival:

• Opportunity — Renewed BTC network strength: The return of China’s mining capacity adds to global hash-rate, reinforcing Bitcoin’s security and potentially supporting long-term price stability.
• Opportunity — Mining-related business demand: Demand for mining rigs, hosting services, and infrastructure support may increase — potentially opening business opportunities for sellers of equipment, collocation operators, or service providers.
• Caution — Profitability under pressure: Given the recent drop in hashprice, mining profitability is under stress. This is especially relevant if BTC prices remain volatile or fall. Those considering mining (directly or via partnerships) must factor in electricity costs, rig efficiency, and difficulty adjustments.
• Caution — Regulatory risk remains: Because mining is technically still banned, there is no guarantee of long-term stability. A change in enforcement or political direction could disrupt operations quickly.
• Opportunity + Risk — Strategic value for VASPs and Stability Services: For EMI/VASP operators (like your organization), the increased reliability of the Bitcoin network could make BTC more attractive as a base asset for custody, remittance, or hedging — but regulatory and systemic risks remain, demanding rigorous risk management.

6. Conclusion

The resurgence of Bitcoin mining in China — climbing back to a 14% global share and reclaiming a position as the world’s third-largest mining hub — is a significant development. It underscores how economic incentives such as cheap electricity and surplus data-center capacity can drive underground mining operations even under formal bans.

For the global crypto ecosystem, this comeback strengthens the network’s hash-rate backbone and reinforces Bitcoin’s resilience as a decentralized asset. For investors, operators, and developers — especially those like you who are involved in VASP, remittance, or stablecoin infrastructure — this shift presents both opportunities and risks. On one hand, renewed mining activity can support infrastructure stability and long-term asset value. On the other hand, profitability pressures, regulatory uncertainty, and geographic concentration demand careful risk management.

Ultimately, China’s quiet mining revival may be part of a broader, gradual recalibration of its approach to digital assets — not through public policy changes, but through a tacit acceptance of mining in energy-rich, remote areas. For those scouting next-generation crypto opportunities or shaping BVASP strategies, this is a signal worth heeding.