China’s Bitcoin Mining: Large Growth Despite the Ban
Contrary to the highly-circulated blanket ban on activities regarding cryptocurrency last year, 2021, China controls 55% of the global Bitcoin hashrate. According to CryptoQuant CEO Ki Young Ju, that shows the country’s quite sobering ability for survival by any means among its local BTC mining community.
Prior to the ban, China was dominant in Bitcoin mining and commanded more than 75% of global combined hashrate output. The government crackdown was reportedly to ensure financial stability and a war against illegal activities. Many were forced to shut down or move their operations to crypto-friendly countries like the U.S. and Kazakhstan.
However, Chinese miners have adapted by running smaller and more clandestine operations to avoid detection. This way, many of the global mining networks can still be maintained. China is also set to amend its AML legislation in 2025, which further alters the country’s stance on cryptocurrency.
U.S. Bitcoin Mining Companies on the Rise
Although most of the BTC hashrate currently resides in China, the United States is fast growing its share; today, it controls 40% of the global mining activity. The reason for this huge growth lies in the institutional investment and friendly regulatory environment.
U.S. mining companies are taking advantage of less expensive power and more lenient regulations compared to those in China. The sector has also drawn the interest of politicians such as former President Donald Trump in support of the sector’s expansion.
Despite such progress, pressure continues to rise on global miners as revenues keep tumbling. This August, revenues of BTC miners reached a one-year low of $827.56 million from $927.35 million in July. Along with the fall, erratic BTC prices have kept miners all over the world in an economic squeeze.
The Future of Bitcoin Mining
The balance of power in the global Bitcoin mining landscape continues to shift, with the U.S. poised to further solidify its position, while miners in China continue to operate under a cloud of regulatory uncertainty. With differing economic and political pressures facing both countries, the future of Bitcoin mining remains highly dynamic and far from certain.
