The Resurgence of Bitcoin Mining in China and Its Implications for Crypto Infrastructure Stocks

The resurgence of Bitcoin mining in China, despite the 2021 regulatory crackdown, has redefined the global crypto landscape. As of 2025, China accounts for 14-20% of the global Bitcoin hashrate, securing the third position globally. This comeback is driven by a combination of cheap surplus electricity in energy-rich provinces like Xinjiang and Sichuan, improved mining efficiency, and the inherent profitability of Bitcoin mining amid rising prices. While the Chinese government maintains a comprehensive ban on cryptocurrency trading and mining under PRC law, the operational reality on the ground reveals a complex interplay of enforcement gaps and strategic re-entry by Chinese miners.

Regulatory Ambiguity and Operational Ingenuity

The PRC government's 2021 crackdown forced many Chinese mining operations to relocate to countries like Kazakhstan and Russia. However, the high costs of international logistics and the logistical challenges of maintaining global infrastructure have incentivized a quiet re-entry into China. Miners are circumventing the ban by operating underground, leveraging gray areas in enforcement, and repurposing existing data center infrastructure. This resurgence raises critical questions about regulatory enforcement consistency and the long-term viability of China's anti-crypto stance, particularly as the government simultaneously promotes its digital yuan and seeks to reduce reliance on the U.S. dollar.

Canaan Inc.: A Case Study in Strategic Adaptation

Canaan Inc., a leading player in the Bitcoin mining sector, exemplifies the strategic agility required to navigate this evolving landscape. As of November 2025, the company has deployed a hashrate of 9.41 EH/s and operates 8.12 EH/s, with plans to add approximately 1 EH/s by year-end. Its cryptocurrency treasury, now holding a record 1,730 BTC and 3,951 ETH, underscores its robust mining output and strategic acquisitions. Canaan's recent $72 million investment from top-tier institutional investors-including Brevan Howard, Galaxy Digital, and Weiss Asset Management-signals strong confidence in its growth trajectory.

The company's competitive edge is further solidified by the launch of its next-generation Avalon A16 series, including the A16XP model, which delivers 300 TH/s of computing power with an energy efficiency of 12.8 J/TH. This innovation aligns with the industry's shift toward energy-efficient hardware, a critical factor in maintaining profitability amid volatile electricity costs and regulatory scrutiny.

Implications for Crypto Infrastructure Stocks

The re-emergence of Chinese miners like Canaan Inc. has significant implications for crypto infrastructure stocks. The increased hashrate contributes to network security and decentralization but also heightens concerns about geographic concentration and regulatory risks. For investors, this duality presents both opportunities and challenges. On one hand, companies with strong operational resilience and institutional backing-such as Canaan-stand to benefit from the sector's growth. On the other, the potential for sudden regulatory shifts in China or other jurisdictions could disrupt market dynamics.
Moreover, the broader crypto ecosystem's reliance on Chinese manufacturing and R&D capabilities means that geopolitical tensions or supply chain disruptions could further impact infrastructure stocks. However, Canaan's expansion of North American mining efficiency and its 91.2 MW installed power capacity in the region suggest a diversification strategy that mitigates some of these risks.

Conclusion

The resurgence of Bitcoin mining in China reflects a resilient industry adapting to regulatory headwinds through innovation and operational flexibility. For crypto infrastructure stocks, this trend underscores the importance of strategic diversification, technological leadership, and institutional credibility. Companies like Canaan Inc., with their robust financials, cutting-edge hardware, and global operational reach, are well-positioned to capitalize on this renaissance. However, investors must remain vigilant about the sector's inherent volatility and the ever-present shadow of regulatory uncertainty.