Despite China’s 2021 cryptocurrency ban, the country remains a dominant force in Bitcoin mining, controlling more than 55% of the global hashrate. However, U.S.-based Bitcoin mining firms are rapidly gaining ground, now accounting for 40% of the global hashrate, signaling a significant shift in mining dynamics between the two nations.
China’s Bitcoin Mining Resilience Amid Ban
According to Ki Young Ju, CEO of CryptoQuant, Chinese mining pools continue to exert substantial control over Bitcoin mining, despite the country’s aggressive crackdown on cryptocurrency operations. Before the ban, China was responsible for over 75% of the global hashrate. After the ban, many miners were forced to shut down or relocate to crypto-friendly nations like Kazakhstan and the U.S. However, Chinese miners have found ways to continue mining covertly, maintaining a major share of the network.
Looking ahead, China’s stance on cryptocurrency regulations may evolve as the country plans to amend its Anti-Money Laundering (AML) laws in 2025 to cover crypto transactions. These changes aim to prevent illegal activities associated with digital assets, signaling potential shifts in how the nation approaches cryptocurrency regulation.
U.S. Bitcoin Mining Firms Expand Rapidly
While China still holds a majority of the global hashrate, the U.S. has emerged as a strong competitor, now controlling 40% of Bitcoin mining activity. This growth is fueled by institutional investment and favorable regulatory conditions. Major U.S. investors and firms have poured capital into the industry, viewing it as a profitable sector with greater operational freedom compared to China’s stricter stance.
Political backing has also played a role in the industry’s growth. In June 2024, former President Donald Trump met with Bitcoin mining executives and promised that his administration would support the industry if he were re-elected.
Challenges Facing Global Bitcoin Miners
Despite the growth of U.S. mining operations, the industry faces challenges. Bitcoin mining revenue saw a significant decline in August 2024, dropping to $827.56 million, down over 10% from July’s $927.35 million. This marks the lowest monthly revenue in a year, driven by Bitcoin’s price volatility, which hovered around $56,000 during August.
The decline in profitability has added pressure on miners globally, even as demand for Bitcoin remains high. However, the shifting hashrate from China to the U.S. has allowed American firms to scale their operations, benefiting from cheaper electricity and more favorable regulations. As Bitcoin mining continues to evolve, the U.S. is set to play an even bigger role in the future of the industry.
