China Bans Bitcoin Mining: The Great Migration

On 18 June 2021, the energy regulator in Sichuan, a mountainous Chinese province with more hydroelectric dams than it can use, told power companies to cut off every bitcoin mining site in the province by 20 June. Some operators had little more than a day to switch off thousands of machines. Across China, warehouses that had hummed around the clock went quiet. Within weeks, roughly half of the computing power securing the bitcoin network had disappeared, and the largest forced move of computing equipment in history was under way.

How dominant China was

Bitcoin mining is the process by which specialised computers check and record transactions on the network. In return the network pays the winner of each round new bitcoin, currently 3.125 coins every ten minutes or so. Miners compete by burning electricity: the more computing power a miner runs, the better its odds of winning each round, a bit like buying more lottery tickets. The machines that do this are called ASICs, chips built to do one job only, and the leading makers, Bitmain and Canaan, are Chinese.

China had everything a miner wanted: the rigs made next door, cheap hydropower in Sichuan and Yunnan during the summer rainy season, and cheap coal power in Xinjiang and Inner Mongolia for the rest of the year. The Cambridge Centre for Alternative Finance, which tracks where mining happens, estimated that China ran about 75 percent of global mining power in late 2019 and about 65 percent on average in 2020. That share had already slipped to about 46 percent by April 2021, but China was still by far the biggest single home of a network marketed as having no centre.

The crackdown

The signal came from the top. On 21 May 2021 the State Council's Financial Stability and Development Committee, chaired by Vice Premier Liu He, said it would crack down on bitcoin mining and trading. Officials cited financial risk; mining's heavy coal use also clashed with the government's carbon targets. Inner Mongolia, which had already announced plans to close mining sites, set up a hotline for residents to report miners. Xinjiang and Qinghai issued shutdown orders in early June. Sichuan followed on 18 June, Yunnan soon after.

On 24 September 2021 the People's Bank of China and nine other agencies went further, declaring all cryptocurrency transactions illegal financial activity. The National Development and Reform Commission said mining would be phased out entirely. By then the miners were mostly gone, at least officially.

What happened to the network

Hashrate is the total computing power working on bitcoin at any moment, the network's combined horsepower. It fell from a peak of about 180 exahashes per second in May 2021 to below 90 by late June, a drop of around half. With fewer machines competing, each round took longer to win, and the gap between blocks stretched well past the usual ten minutes. Payments still went through, but more slowly.

Bitcoin has a built-in correction for exactly this. Every 2,016 blocks, roughly every two weeks, the software resets the difficulty, how hard the puzzle is, so that blocks keep arriving about every ten minutes regardless of how many machines are running. It works like a thermostat. On 3 July 2021 difficulty fell by 27.9 percent, the largest cut in bitcoin's history. The miners still running suddenly earned far more for the same electricity, which paid for the ones relocating. By early 2022 the network's computing power was back above its May peak.

Where the machines went

Miners who could afford to shipped container loads of rigs abroad. The United States was the main winner. Texas, with a deregulated grid, cheap wind and gas power and a welcoming state government, became the centre of the industry. Listed US miners such as Riot Platforms, Marathon Digital (now MARA Holdings) and Core Scientific expanded fast and bought machines from the Chinese makers. Cambridge estimated the US share of global mining at 35.4 percent by August 2021 and 37.8 percent by January 2022.

Kazakhstan, with cheap coal power and a border with China, took the second-largest share, about 18 percent by August 2021. Its grid could not cope. Power shortages followed, and when unrest swept the country in January 2022 the government shut the internet, knocking miners offline. It later cracked down on unregistered operations and raised taxes on the industry. Russia and Canada took smaller shares.

China never quite left

Cambridge recorded China's share at zero in July and August 2021. Then it found something awkward. In January 2022 its data, based on the locations of machines connecting to large mining pools, put China back at about 21 percent. Miners had gone underground, using hidden connections that disguise where traffic comes from, and small off-grid sites near power stations with nowhere else to sell their electricity.

The quiet comeback continued. In November 2025 Reuters reported, citing data from Hashrate Index, a service run by the mining company Luxor, that China accounted for about 14 percent of global mining power in late 2025, third behind the United States and Russia. The data firm CryptoQuant put the figure at 15 to 20 percent. Canaan's China sales rose above half its total in the second quarter of 2025, according to a source quoted by Reuters. The ban itself has not been lifted, and analysts quoted by the South China Morning Post saw little chance it would be.

The network that emerged is far bigger. Total mining power passed one zettahash, a thousand exahashes per second, in September 2025, around five times the pre-ban peak, and was close to that level in the late summer of 2026. Mining is now an American industry with listed companies, lobbyists and political friends in Washington. The ban did not stop bitcoin. It moved most of its machinery to the country that China is most competing with, while leaving a sizeable slice running quietly at home.