Bitcoin Mining in China Never Stopped Despite Policy Shifts, Surges with Renewable Energy

• China’s Bitcoin mining never fully ceased, with the network hashrate bouncing back despite policy changes in 2021.
• China’s miners shifted to smaller, renewable energy-based operations to align with emission targets and avoid capital outflows.
• By December 2021, China still held 19.1% of the global Bitcoin hashrate, confirming mining’s resilience despite earlier restrictions.

According to Bitcoin Magazine, Bitcoin mining was never outright banned in China, despite reports suggesting otherwise. Although mining operations faced disruptions, public data and legislation indicate that mining activity continued. The temporary decline in hashrate that followed official announcements fueled misunderstandings, but the network recovered, proving otherwise. 

While some media outlets referred to China’s policy changes as a ban, data from various sources, including the Cambridge Centre for Alternative Finance, showed that mining persisted, especially in specific regions.

Hashrate Decline and Misleading Reports

In April 2021, China accounted for 46% of the global Bitcoin hashrate. Following policy announcements that May, the network hashrate dropped by 51.1%, leading many to believe that mining had been banned. 

However, according to Bitcoin Magazine, this wasn’t the case. NBC reported that some miners remained operational, and by September 2021, Cambridge data confirmed that China still contributed 22.3% of the global hashrate. Despite widespread reports, Bitcoin mining continued to operate at reduced levels throughout the country.

Resurgence of Mining and Environmental Shifts

In December 2021, China maintained 19.1% of the global hashrate, further disproving claims of an outright ban. By 2022, more reports emerged confirming significant mining activity still operating within China. 

Miners increasingly turned to renewable energy sources, such as hydropower, wind, and solar, particularly in regions like Inner Mongolia. This transition aligned with China’s goal of limiting emissions while stabilizing its power grid. Notably, smaller mining operations utilizing environmentally friendly methods were prioritized.

Reasons for the Mining Suspension

While large-scale mining operations faced restrictions, the primary concern was capital controls. Mining had become a method for converting Yuan into Bitcoin and later into USD, which conflicted with China’s financial regulations. 

Moreover, the use of coal-powered facilities also risked undermining China’s emissions targets. In response, authorities allowed smaller operations to monetize excess renewable energy, stabilizing power grids while reducing the risk of capital outflows. As a result, Bitcoin mining in China adapted to fit both environmental and economic policies.