Bitcoin mining rebounds in China, defying ’21 ban

Bitcoin mining is quietly staging a comeback in China despite being banned four years ago, as individual and corporate miners exploit cheap electricity and a data centre boom in some energy-rich provinces, according to miners and industry data.

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China had been the world’s biggest crypto mining country until Beijing banned all cryptocurrency trading and mining in 2021, citing threats to the country’s financial stability and energy conservation.

After having seen its global bitcoin mining market share slump to zero as a result of the ban, China crept back to third place with a 14% share at the end of October, according to Hashrate Index, which tracks bitcoin mining activities.

The resurgence in bitcoin mining, which has also been corroborated by rig maker Canaan Inc’s fast-rebounding sales in China, could act as a demand and price support for the world’s largest cryptocurrency.

Wang, a private miner in Xinjiang, said he started mining late last year in the energy-abundant province.

“A lot of energy cannot be transmitted out of Xinjiang, so you consume it in the form of crypto mining” Mr Wang said, asking to be identified by just his last name. “New mining projects are under construction. What I can say is that people mine where electricity is cheap”

China’s state planning body, the National Development and Reform Commission, which issued the ban in 2021, and the Xinjiang government did not reply to faxed Reuters requests for comment.

MINING RESURGENCE

Beijing’s crackdown on the sector in 2021 led to miners shutting down local operations and fleeing to overseas markets such as North America and Central Asia.