Chinese miners continue to dominate the global Bitcoin mining capacity, despite the industry being banned in 2021. According to Cointelegraph, more than 55% of Bitcoin mining power is still controlled by Chinese mining groups. This surprising dominance persists even after China’s ban on Bitcoin mining and trading. Although many large mining factories reportedly relocated to the US following the ban, American Bitcoin miners only represent about 40% of the global scale.
Studies indicate significant differences in the organization of mining networks. While US mining pools largely operate within large organizations, Chinese mining pools support relatively small, sporadic miners in Asia. Despite the ban, Chinese miners still hold the majority of the hashrate, which is an indicator of global Bitcoin mining capacity. ESG Bitcoin researcher Daniel Batten suggested that the media may have exaggerated the extent of the regulation, as the government aims to gradually eliminate excessive electricity demand to address climate and anti-money laundering concerns.
While China plans to amend its Anti-Money Laundering (AML) regulations by 2025 to include cryptocurrency transactions and Bitcoin mining, Chinese users continue to find ways to access the market, leading to increased risks related to money laundering. Furthermore, there are speculations that China may lift the ban on Bitcoin by the end of 2024, as shared by Galaxy Digital CEO Mike Novogratz.
In addition to regulatory uncertainties, Bitcoin miners worldwide are facing significant profit pressures. Data from Bitbo shows that in August 2024, miners experienced the lowest revenue in the past year, amounting to only 827.56 million USD, a decrease of more than 10.5% compared to July. This represents the worst revenue month for Bitcoin miners since September 2023, when they earned $727.79 million. Correspondingly, Bitcoin mining output also decreased from 14,725 BTC in July to 13,843 BTC in August.
