Canaan’s mining rig sales in China surged, making up over half its revenue in Q2 this year.
China is pulling in 14% of global Bitcoin mining power, despite its own ban still being on paper. That’s what’s playing out right now across places like Xinjiang and Sichuan, where miners are lighting up machines in energy-heavy regions while authorities mostly look the other way.
China had completely dropped off the mining map in 2021, when the government banned all crypto trading and mining, calling it a threat to financial stability and energy policy.
But now, China sits at number three globally, behind only the U.S. and Kazakhstan. That’s after four years of supposed zero tolerance.
Mining activity grows as cheap electricity flows
Local miners say it’s about the power, specifically, power that nobody else is using. Wang, who runs a private mining operation in Xinjiang, said he got back into it late last year.
“A lot of energy cannot be transmitted out of Xinjiang, so you consume it in the form of crypto mining,” Wang said. “New mining projects are under construction. What I can say is that people mine where electricity is cheap.”
There’s no public comment from China’s National Development and Reform Commission or the Xinjiang government, both of which were contacted by Reuters. But the lack of enforcement is helping mining operations grow fast.
One anonymous source at a major rig maker allegedly said some Chinese cities overbuilt data centers during the last tech push, and now those idle resources are being rerouted to mining.
Patrick Gruhn, who runs the crypto infrastructure firm Perpetuals.com, said the sudden return to mining in China signals something deeper. “Chinese policy flexibility emerges when economic incentives are strong in specific regions,” Patrick said. “The resurgence of mining activity in China is one of the most important signals the market has seen in years.”
Duke Huang, a former miner based in Sichuan, said the activity never really stopped. “It’s a sensitive area,” Duke said. “But people who get cheap electricity are still mining.” He said some of his former partners have already gone back in.
The Bitcoin price jump in October, driven in part by President Donald Trump’s pro-crypto policies, also gave the industry a lift. While Bitcoin is now down about one-third from that recent peak, the mining payoff in China is still high, especially with local energy prices far below international rates.
Sales surge shows companies chasing demand
Hardware sales show just how strong the demand is. Canaan, the world’s second-largest Bitcoin mining rig maker, saw 30.3% of its global revenue come from China last year. That’s up from just 2.8% in 2022. And in Q2 this year, over half of the company’s revenue came from China, according to someone familiar with the numbers.
Canaan wouldn’t confirm that percentage but did say the spike was due to rising Bitcoin prices, U.S. tariff issues messing with American buyers, and a growing shift in how China views crypto. In a statement, the company said, “In China, the R&D, manufacturing, and sale of mining machines are permitted.” They wouldn’t say anything about mining policy itself.
Julio Moreno, who leads research at CryptoQuant, put the real hashrate inside China even higher, between 15% and 20% of global capacity. He said, “Bitcoin mining is still officially banned in China. However, there continues to be significant capacity operating.”
And while officials aren’t speaking up, financial moves hint at a softening stance. Hong Kong introduced a stablecoin law in August, letting the city regulate crypto tied to fiat currencies.
At the same time, Beijing was looking into yuan-backed stablecoins as a tool to promote China’s currency globally. That effort was seen as part of a response to U.S. stablecoin expansion.
Liu Honglin, who runs the Man Kun Law Firm, said what most people are thinking but won’t say out loud. “I personally think government policies against mining will be gradually loosened, because you simply cannot stop such activities completely.”
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