Bitcoin: 55% Of Global Mining Under The Secret Control Of China

Despite a general ban on cryptos decreed in 2021, China retains its grip on the Bitcoin mining industry. A recent analysis reveals that the country still controls 55% of the global hash rate, even outpacing the United States.

China still dominates Bitcoin mining

Three years after Beijing banned cryptos, China retains a surprising grip on the Bitcoin network. According to Ki Young Ju, CEO of CryptoQuant, Chinese mining pools still control 55% of the global hash rate, compared to 40% for their American counterparts.

This resilience is partly due to the ingenuity of local miners. Despite the crackdown, many have found ways to continue their activities in the shadows, using various techniques to circumvent restrictions. Some have relocated their operations to neighboring countries while maintaining remote control from China.

Moreover, the Chinese mining infrastructure, developed over years of rapid growth, remains a major asset. Regions rich in hydroelectric power, such as Sichuan, retain a significant competitive advantage in terms of operating costs.

A regulatory shift on the horizon?

Despite this paradoxical situation, there are signs of a possible evolution in China’s position on Bitcoin. Discussions are underway to integrate crypto transactions into anti-money laundering regulations by 2025, suggesting a more pragmatic approach.

This potential opening is part of a broader context of technological competition with the United States. As mining becomes more professional across the Atlantic, Beijing might seek to keep pace in a sector it once dominated.

However, Chinese authorities remain cautious. Any relaxation will need to be accompanied by a strict regulatory framework to control financial risks and limit capital outflows, major concerns of the government.

China’s persistent grip on Bitcoin mining, despite the official ban, illustrates the complexity of the global crypto landscape. Even the crypto black market in China is not lagging behind and continues to thrive. The future of the sector in China remains uncertain but could hold surprises.