In the torrent of history, some chapters seem to be destined, yet they always reappear in unexpected ways. In 2021, the Chinese government, with a thunderous momentum, completely banned cryptocurrency mining activities due to dual considerations of financial stability and energy security. With a single ban, China's mining industry, which once occupied half of the global Bitcoin computing power, fell silent in an instant, as millions of mining rigs extinguished their indicator lights overnight, staging an epic “great migration of computing power.” However, four years later, a surprising reality is quietly emerging: China's Bitcoin mining activities have not disappeared; instead, they have revived in a secretive and tenacious manner, with its computing power share climbing to third in the world.
This is not only a test of the policy red line, but also a complex game woven together by economic incentives, local tacit agreements, and technological realities.
Computing Power Landscape Returns
According to the latest data from the professional analysis agency Hashrate Index as of the end of October 2025, China's Bitcoin network's computing power share has strongly rebounded to about 14%, corresponding to a computing power of 145 EH/s. This figure surpasses former popular destinations for computing power migration such as Kazakhstan, reclaiming its position as the world's third-largest mining country, trailing only behind the United States, which leads with a share of 37.8% (approximately 389 EH/s), and Russia, which ranks second with 15.5%.
This is not a baseless speculation. Data from the upstream of the industry chain provides solid evidence for this. The financial report of Canaan, the world's second-largest mining rig manufacturer, shows a dramatic change in the revenue share from the mainland China market: it soared from a low of 2.2% after the ban in 2022 to 30.3% in 2024, and even exceeded 50% in the second quarter of 2025. Chinese buyers have once again become the dominant force in the mining rig market, a phenomenon that undeniably confirms the vigorous resurgence of underground mining activities.
The silent return is not a coincidence, but rather the result of three core factors working together, which collectively create an irresistible economic gravity.
- Irresistible cheap electricity
The essence of Bitcoin mining is a game of energy consumption, and electricity costs are the lifeline determining the survival of miners. The western regions of China, especially Xinjiang, Sichuan, and Inner Mongolia, have extremely rich and low-cost hydropower, wind power, and photovoltaic resources. Due to the limitations of grid transmission capacity and local consumption capacity, a large amount of electricity is wasted during periods of abundant water or when the wind and solar energy are at their peaks, resulting in the so-called “abandoned water,” “abandoned wind,” and “abandoned light” phenomena.
For miners, the industrial electricity prices in these regions range from 0.2 to 0.35 RMB per kilowatt-hour, which is far below the international average, creating an unparalleled cost advantage. A miner from Sichuan vividly described: “If you don't mine, it's a waste; otherwise, the electricity will just flow away for nothing.” The existence of this “stranded energy” provides the most fertile ground for underground mining. As long as there is profit to be made, capital and Computing Power will seep into every area with a depression.
- The “Unexpected Assistance” of AI Data Centers
In recent years, driven by the wave of artificial intelligence, a frenzy of building AI and cloud computing data centers has emerged across China. However, this forward-looking investment has led to a large number of idle server rooms and electricity quotas. For some local governments facing financial pressure, these idle “new infrastructure” have become a burden.
Thus, a tacit understanding was formed. Localities “turning a blind eye” tacitly allow these facilities with legal electricity permits and physical space to shift their business towards high-energy-consuming Bitcoin mining. This not only effectively absorbs the excess electricity resources but also brings tax revenue and employment to the local area, revitalizing idle assets. In a sense, the AI boom inadvertently provides a perfect “disguise” and ready-made infrastructure for the return of Bitcoin mining.
- The “Golden Temptation” of Rising Bitcoin Prices
Economic incentives are always the most primitive driving force. In 2025, the price of Bitcoin once soared to a historical high of $126,000. Even after a subsequent decline, maintaining a range of $80,000 to $90,000, profits for miners with efficient Mining Rigs and low electricity costs remain considerable. According to estimates, at that price level, each EH/s of Computing Power could still earn $30 to $40 per day, far exceeding electricity costs. The enormous profit margin attracted a large amount of capital and experienced old miners back to the table, willing to take policy risks in this “underground gold rush.”
American “Energy Special Forces”
As we focus on the resurgence of mining in China, a more historically ironic parallel story is unfolding across the ocean. In 2021, it was not just the machines and Computing Power that were “zeroed out,” but also a group of “energy special forces” who had the deepest understanding of energy management and large-scale Computing Power deployment worldwide.
The expelled Chinese mining companies and engineers, armed with the skills they honed while negotiating with the power grid by the Dadu River in Sichuan, have flocked to the United States, particularly to Texas, which has an independent power grid and a free electricity market. They quickly upgraded their connections with power station managers who “drank heavily” to secure low electricity prices back home into high-frequency trading algorithms that adapt to the real-time price fluctuations in Texas. The automated programs they developed can go on a frenzy of “consuming” electricity to relieve the grid when prices are negative (a common occurrence during Texas's wind power surplus) and instantly cut loads to “sell electricity” back to the grid when prices soar, showcasing an arbitrage capability that astounds local electricity traders in the U.S.
More importantly, they brought the “modular, containerized, minimalist cooling” rapid infrastructure capabilities developed in China to the United States, compressing the construction cycle of data centers from 2-3 years down to 3-6 months.
Today, as the AI revolution ignited by ChatGPT presents unprecedented power shortages for American tech giants, they are horrified to find that the wait time for powering a new AI data center can take years. Meanwhile, those who hold a large number of grid connection permits and know how to quickly deploy high-density Computing Power facilities, the “former Bitcoin Mining companies,” have suddenly become a lifeline. American AI giants are signing billion-dollar agreements with these companies to rent their power and facilities for training AI models.
History played a huge joke: China, for the sake of energy security and financial sovereignty, actively stripped away the Mining industry; and this part that was stripped away, the “excess capacity” and “backward technology,” unexpectedly became the most scarce and valuable “immediate combat power” and the “stable cornerstone” of its main competitor's AI strategy.
Sword of Damocles
Despite the booming underground mining activities, the sword of Damocles hanging over them has never moved away. China's crypto ban has not been abolished, which means that all mining activities remain in a gray area. The tragedy of “all mining rigs shut down overnight” in Sichuan in 2021 is still fresh in memory, and the risks of sudden power outages, hefty fines, and even criminal liability could strike at any time.
In addition, as the deadline for China's “dual carbon” goals in 2026 approaches, if the central government takes strong measures to fulfill its environmental commitments, the local “protection umbrellas” may instantly become ineffective. At that time, today's prosperity may once again turn into a bubble.
Analysts generally believe that as long as the Bitcoin price remains high, and the local fiscal pressure and energy surplus issues persist, this “cat-and-mouse game” between regulation and the market will continue. The “phoenix nirvana” of Bitcoin mining in China has not only profoundly changed the global computing power landscape but also vividly illustrates a principle: when the economic gravity is strong enough, even the strongest policy red lines may be quietly shifted and blurred. The future direction, whether it will be another crackdown or gradual tacit approval, remains a puzzle full of variables.
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