Bitcoin mining has seen a resurgence in China despite being banned since 2021, with miners quietly starting operations to use cheap electricity.
China Now Accounts For 14% Of The Global Bitcoin Hashrate
Back in 2021, China enforced its infamous Bitcoin trading and mining ban, triggering a bearish slump for the market and resulting in a global Hashrate crash. At the time, the country made up the largest share of BTC mining in the world.
The crackdown meant that the nation’s miners had to relocate elsewhere, which was a slow process, and it wasn’t until many months later that the cryptocurrency’s Hashrate, a measure of the total amount of computing power connected to the network, was able to recover.
As data from Blockchain.com shows, the 7-day Hashrate witnessed a decline of more than 50% between May and July 2021.
How the 7-day average BTC Hashrate has changed over the years | Source: Blockchain.com
The metric gradually recovered after the July bottom and reached the same levels as pre-China ban by December of that year. Since then, the network has seen rapid expansion, and today, the Hashrate is so huge that the China ban only appears like a blip on the chart.
Interestingly, though, part of the latest expansion in the metric has been coming from a source few would expect. As reported by Reuters, mining in China is quietly observing a resurgence.
Major Bitcoin mining machine maker Canaan has seen a significant rebound in sales in China, with 30.3% of its global revenues coming from the country last year. “China’s contribution to Canaan’s sales jumped further to more than 50% during the second quarter this year,” noted Reuters, citing an unnamed source with direct knowledge.
Bitcoin mining data provider Hashrate Index also shows growth in China, putting the country’s latest share of global mining at 14%.
The global BTC mining heatmap | Source: Hashrate Index
Only Russia (15.5%) and the US (37.7%) host a larger share of the world Hashrate. Thus, it seems the country has quickly grown back into dominance. As for what’s behind the growth, the answer seems to be a mix of the cryptocurrency’s bull run, availability of cheap electricity in some provinces, and a subtle shift in the nation’s stance toward the sector.
Earlier in the year, Beijing was weighing a plan to allow the use of yuan-pegged stablecoins more widely outside of China. In September, the first such class of assets was launched in Kazakhstan.
Hong Kong approved its stablecoin bill in August, allowing private companies to apply for an issuer license in the Chinese city. As of yet, though, no licenses have been handed out.
BTC Price
Bitcoin saw a brief fall below $81,000 on Friday, but its price has since bounced back as it’s now floating around $86,000.
Looks like the price of the coin has recovered a bit since its latest plunge | Source: BTCUSDT on TradingView
Featured image from Dall-E, HashrateIndex.com, Blockchain.com, chart from TradingView.com
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