China continues to dominate Bitcoin mining with 55% of global hashrate despite a cryptocurrency ban in 2021, while US mining firms are rapidly increasing their share to 40%.
Bitcoin Mining Dominance Shifts to US As China’s Bitcoin Hashrate Grows by 55%
Despite China’s 2021 ban on the cryptocurrency, the country still retains substantial control over the Bitcoin mining network, with more than 55% of the global hashrate.
However, as the legitimacy of the Bitcoin mining movement grows, especially in the US, American mining firms are rapidly closing the gap.
Currently the US controls 40% of global hashrate due to fundamental changes in mining dynamics as political, regulatory and economic pressures affect the two countries differently.
China’s Bitcoin Mining: Exponential Growth Amid Ban
According to CryptoQuant CEO Ki Yang Ju, Chinese mining pools still control 55% of the global Bitcoin mining network. The finding is surprising, given China’s aggressive anti-crypto measures in recent years.
However, Chinese miners found ways to keep working, even in the face of government pressure.
Before the ban in 2021, China dominated Bitcoin mining, at one point contributing over 75% of the global hashrate.
At the time, the Chinese government framed the ban as a necessity to maintain financial stability and curb illicit activities.
As a result, many miners have had to shut down operations, while others have moved to crypto-friendly countries such as the US and Kazakhstan.
Chinese miners, however, have shown remarkable resilience. They are used to using smaller, more subtle operations to avoid detection, allowing them to capture a larger share of global hashrate.
China’s stance on cryptocurrency regulation could change as the country plans to amend its anti-money laundering (AML) laws by 2025.
The changes are expected to include cryptocurrency exchanges, with the aim of reducing illicit activities involving digital assets.
US Bitcoin mining firms are on the rise
While China still accounts for most of the hashrate of the Bitcoin network, the US controls 40% of global mining activity.
Bitcoin mining growth in the US is fueled by institutional investment and favorable regulatory environment.
Institutional interest in bitcoin mining has grown in the US as large investors and firms look to take advantage of the sector’s advantages and ease of operations compared to China.
This trend is supported by the participation of major political figures, such as former President Donald Trump, who expressed his support for the crypto-mining industry.
In June 2024, Trump met with mining executives in Florida and promised that his administration would make sure the industry was treated fairly if re-elected.
As the US gains more control over Bitcoin mining, global miners are facing major challenges, especially in terms of profitability.
Bitcoin mining revenue plummeted in August 2024, the lowest monthly revenue in a year.
Miners’ salaries totaled $827.56 million in July, down 10.5% from July’s $927.35 million. Despite the decline, revenue is still up 5% annually by 2023.
This gain was further offset by the volatility and volatility of Bitcoin prices , which hovered around $56,000 throughout August with heavy market fears.
The combination of bitcoin price volatility and declining mining revenues has created an environment where miners are under increasing financial pressure, even as demand for bitcoin remains high.
Miners are feeling the upheaval around the world, but the hashrate shift from China to the US has allowed American mining firms to expand their operations and take advantage of cheap electricity and favorable regulatory conditions.