At the start of the 2020–2022 period, a large share of Bitcoin mining capacity (hash rate) was located in China, supported by access to industrial electricity and established mining supply chains. This concentration made the global network sensitive to China’s policy shifts and local power availability.
Inner Mongolia announced it would close existing cryptocurrency mining projects and stop approving new ones as part of meeting energy-use and emissions targets. The announcement signaled that local enforcement—especially in coal-heavy regions—could tighten quickly even before a nationwide mining ban.
China’s State Council Financial Stability and Development Committee publicly called for cracking down on Bitcoin mining and trading. This high-level signal was important because it coordinated provincial actions and accelerated shutdowns across multiple mining regions.
Sichuan—known for hydro-powered mining—issued orders to clean up and shut down identified mining projects on a tight deadline. Because Sichuan was a major seasonal destination for miners, this helped turn a regional crackdown into a nationwide exit for many operators.
After large amounts of mining equipment went offline, Bitcoin’s built-in “difficulty” (how hard it is to find the next block) automatically adjusted downward by about 28%. This showed how the protocol stabilizes block production even when a major mining region exits suddenly.
University of Cambridge estimates showed China’s share of global Bitcoin hash rate effectively dropped to zero by the end of August 2021. The same data showed large gains for the United States and Kazakhstan, marking a major geographic redistribution of mining power.
A multi-agency notice led by the People’s Bank of China reinforced that crypto-related activities (including services supporting trading) were illegal financial activities. While mining had already been hit through provincial actions, the broader trading and service restrictions increased pressure on remaining crypto businesses and support networks.
As miners moved into Kazakhstan, electricity demand rose and concerns grew about grid reliability. Reports described the government moving toward rationing power to miners and disconnecting them when the grid was under stress, showing a key downside of fast, large-scale relocation.
Cambridge-based estimates indicated the United States became the largest destination for Bitcoin mining, overtaking China for the first time. This shift reflected new North American capacity, equipment imports, and miners relocating after China’s shutdowns.
By December 2021, network hash rate measurements indicated that mining capacity had largely recovered from the mid-2021 collapse. Recovery was driven by relocated operations restarting abroad and new facilities coming online in places such as the United States.
Kazakhstan’s “digital mining fee” tied to electricity consumption came into force at the start of 2022. This policy shift signaled that host countries were moving from welcoming relocated miners to actively managing their grid impacts and extracting tax revenue.
During major protests, Kazakhstan experienced a nationwide internet shutdown that reduced global Bitcoin hash rate in the short term. The episode highlighted a new kind of concentration risk: when mining relocates to a few jurisdictions, local political and infrastructure shocks can ripple through the network.
The White House Office of Science and Technology Policy released a report on the climate and energy implications of crypto-assets in the United States. Coming after the hash-rate migration into North America, it reflected growing scrutiny of how large mining loads affect emissions, electricity prices, and grid reliability.
By the end of 2022, Bitcoin mining had largely shifted from China-centric concentration to a more geographically dispersed map led by the United States, with notable roles for Kazakhstan and Russia. The 2020–2022 crackdown-and-migration cycle left a clear legacy: mining became more international, while governments outside China began treating mining as a regulated industrial energy user rather than a niche tech activity.
China mining crackdown and the global redistribution of hash rate (2020–2022)