Ignoring the ban, Bitcoin mining is becoming active again in China

Using low-cost electricity and rising demand for data centers in China’s energy-rich provinces, various individuals and companies involved in mining operations are taking advantage of the opportunity.
 

Before 2021, China was the world’s largest crypto-mining country. Citing threats to the country’s financial stability and natural resource conservation, Beijing banned all kinds of cryptocurrency transactions and mining at that time.
 

According to the Bitcoin-mining tracking site Hashrate Index, China’s share in the global Bitcoin-mining market dropped to zero as a result of the ban. Later, by the end of October, China gradually climbed back to third place with a 14 percent share.

This resurgence in China’s Bitcoin mining is not only seen in mining operations but also in the increased sales of rigs or mining machines by the equipment manufacturer Canaan Incorporated. And as mining increases in the country, it becomes helpful in maintaining Bitcoin’s demand and stabilizing its price.
 

Wang, a miner from China’s Xinjiang province, said he began mining in this energy-rich region at the end of last year.

“Much of Xinjiang’s electricity cannot be transmitted elsewhere. So you can use it for crypto mining. My new mining project is under construction. What I really want to say is that people mine where electricity is cheap.”
 

China’s state-owned planning agency, the National Development and Reform Commission, imposed the Bitcoin mining ban in 2021. The government of Xinjiang an autonomous region in northwest China did not respond to Reuters’ request for comments regarding the renewed rise in mining.
 

Due to Beijing’s strict measures in 2021, local operations were forced to shut down and miners had to relocate to foreign markets such as North America and Central Asia.
 

Reuters wrote that during the period when Bitcoin mining began recovering in China, Bitcoin’s price also reached a record high in October. This happened mainly for two reasons: U.S. President Donald Trump adopted crypto-friendly policies at that time, and people’s confidence in the dollar had decreased. As a result, Bitcoin mining has become more profitable than before.
 

However, due to declining risk appetite globally, the cryptocurrency’s price has fallen to about one-third of its peak level in October.