Chinese mining pools control 55% of Bitcoin hashrate despite a 2021 crypto ban, showcasing their adaptability to regulations.
U.S. mining companies now manage 40% of Bitcoin’s global hashrate, focusing on large-scale institutional operations.
China’s 2025 AML regulation updates may alter crypto mining dynamics, targeting stricter oversight on digital assets.
Although there has been a ban on cryptocurrency activities in the country, 55% of the hashrate is controlled by Chinese mining pools in the global Bitcoin network. The continued dominance underlines the resilience created by Chinese miners, who apparently have managed the strict regulatory conditions imposed by the government.
Chinese Mining Pools Retain Majority Share of Bitcoin Network
Despite the ban on cryptocurrency trading and mining launched in 2021, China still controls upwards of half of the global Bitcoin hashrate. According to Ki Young Ju, chief executive of CryptoQuant, Chinese mining pools control 55% of the Bitcoin network. This is despite restrictions preventing domestic exchanges and banning all mining activities within its borders.
https://twitter.com/ki_young_ju/status/1838140712736711110
Chinese mining pools have adapted to the strict regulations by supporting smaller miners across Asia, bringing closer stealth to their operations. These miners have employed advanced technologies and decentralized network setups to avoid any form of detection, hence sustaining their mining activities. That indicates the adaptability of Chinese miners in response to regulatory constraints, sustaining a strong presence in the Bitcoin mining landscape.
U.S. Mining Companies Gain Momentum
Web3 pools remain the largest, but US-based mining companies are steadily gaining influence. Today, US mining companies operate roughly 40% of the global Bitcoin hashrate, most catering to institutional miners in North America. This growth represents a strategic shift as US companies continue investing more heavily in mining infrastructure, favorable regulatory environments, and abundant energy resources.
The emergence of mining pools in the U.S. completely contrasts with their operational models. Chinese pools focus on providing services to smaller, independent miners, while those in the U.S. center their operational focus on large-scale institutional operations, positioning themselves as key players in this growing market. To that end, global Bitcoin mining power has gradually rebalanced, with companies based in the United States slowly catching up to those in China.
Future Regulatory Impact on Bitcoin Mining
China's dominance of the Bitcoin network continues amid talks of potential changes to the country's regulatory structure. For example, AML regulations are due for an update in 2025 that will introduce broader oversight, including cryptocurrency transactions. These proposed changes come amidst growing concerns about money laundering risks associated with digital assets and imposing stricter guidelines on market participants.
Ever-changing regulatory landscapes may further change the dynamics of Bitcoin mining. Market pressure also presents challenges, such as reduced miner revenues. Bitcoin miners globally saw revenue fall to $827.56 million in August 2024, the lowest monthly number since September 2023.
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