Bitcoin mining: Despite the crackdown, China is back as the second-largest miner

• China’s crackdown on Bitcoin trading and mining had reduced the country’s contribution to mining drastically last year.
• However, miners seem to have gone underground instead of stopping or moving.
• China contributes over 20% of the world’s Bitcoin mining power today.

China’s commitment to preventing Bitcoin miners from running operations in the country seems to be wavering. In an update to the Cambridge Bitcoin Electricity Consumption Index (CBECI), the institution shows that the country’s contribution to global Bitcoin mining computing power crossed 20% in January this year.

This after it had fallen to zero post the fresh crackdown against Bitcoin mining in August. Data from the new research shows that activity has picked up again and China is now the second-largest Bitcoin miner, after the US.
Cambridge Bitcoin Mining Map
The CBECI is a tracker of global computing power and energy consumed by Bitcoin mining globally. Compiled by the Cambridge Centre for Alternative Finance (CCAF), it provides information on the total amount of electricity and power consumed by Bitcoin miners worldwide.
Steady rise
In 2021, after China began its crackdowns on Bitcoin mining in the country, the tracker showed that its contribution to Bitcoin mining dropped to zero quickly. China went from providing over 80% of the world’s Bitcoin mining computing power to zero by August 2021. However, since then, the country’s contribution seems to be rising again.

According to the updated tracker, China was providing 22.29% of the computing power in September 2021, followed by 18.09% in October, and so on. In January last year, China accounted for over 50% of the computing power going into mining Bitcoin worldwide.

Month	China’s contribution to Bitcoin mining
August 2021	0%
September 2021	22.29%
October 2021	18.09%
November 2021	18.12%
December 2021	19.14%
January 2022	21.11%

To be sure, China’s contribution to Bitcoin mining has been dropping since the late 2020s, which is when different authorities in China began their crackdowns. In June last year, the country’s contribution had dropped to 34.3%, but it plummeted after April when the People’s Bank of China and other crucial authorities passed anti-crypto rulings.

This led miners to other countries, including the US. For instance, the CBECI had shown that the US became the biggest miner of Bitcoin, along with countries like Kazakhstan and others.

While the US remains at the top, it would seem that all miners didn’t move out of China at the time.

Read the blogpost here.

While it’s possible that some mining firms went behind VPNs to hide their location, large miners and crypto exchanges, like Huobi Global, had announced intentions to leave the country in December last year.

“In the past, we had been communicating with regulators to see if there are still ways to legally operate in China. But this time, there’s no room for discussion.” Du Jun, co-founder of Huobi, told Bloomberg at the time. “Our strategy is all about going global now.”