Canaan, one of the leading manufacturers of Bitcoin mining hardware, has recently attributed a recent 10% decline in global Bitcoin hashrate to renewed shutdowns and operational disruptions in China. His comments have reignited conversation about China’s influence over global mining ecosystem despite formal prohibition against cryptocurrency mining operations within its borders.
Speaking in a recent interview, former Canaan executive Richard Koppes suggested the hashrate drop was caused primarily by power restrictions, regulatory enforcement measures and forced shutdown of covert mining operations that had continued operating in certain regions. These disruptions removed significant computing power from the network rapidly.
Bitcoin’s hashrate, or total computing power securing the network, can serve as an indicator of miner confidence and network security. A sudden decrease may reflect external shocks like energy shortages, regulatory action or hardware outages rather than any fundamental changes to Bitcoin itself.
China officially banned cryptocurrency mining in 2021, prompting miners to move abroad such as the US, Kazakhstan and parts of Latin America. Industry insiders believe some unofficial mining activity continued within China however in regions with cheap or excess electricity access.
Recent crackdowns and tougher enforcement measures have made it increasingly challenging for Canaan operations to continue, according to one former Canaan executive. “When authorities cut power or close facilities, the effects are immediate on hashrate,” they stated, noting that even partial disruption in China could still impact network metrics globally.
Blockchain data shows that hashrate has declined over several days, coinciding with reports of energy rationing and inspections across multiple Chinese provinces. While miners outside China continue to expand operations, analysts note that adding capacity will take time, restricting their ability to quickly offset sudden losses.
Experts maintain that Bitcoin’s network remains secure despite this decline, noting that a 10% drop is well within historical fluctuations and automatically adjusted mining difficulty roughly every two weeks to account for changes in hashrate and ensure stable block production.
One mining analyst commented, “Hashrate fluctuates constantly. What matters is whether declines persist over long periods. So far, these appears to be temporary adjustments rather than structural problems.”
This event also underlined the continued importance of energy access in Bitcoin mining. Although geographically dispersed operations can now access energy more readily, sudden power disruptions in any major region still have ripple effects across their networks and demand reliable energy policies and infrastructure for large-scale mining operations.
Canaan, which produces ASIC miners, has acknowledged that regulatory changes in China altered their customer base and supply chains. Since then, Canaan has focused its sales expansion to North America and other areas where mining operations are allowed.
Forecasters predict the recent hashrate decline could promote further decentralization as miners search for jurisdictions with clearer regulations and reliable energy supplies; however, they caution of geopolitical and energy risks being ever present for the industry.
While China remains at the forefront of many minds when discussing Bitcoin mining, analysts emphasize its global reach. According to them, hashrate decline is proof of resilience but cannot protect from real world disruptions.
As the industry adapts, its focus remains on long-term stability rather than short-term fluctuations; miners, manufacturers and policymakers all play a crucial role in shaping Bitcoin’s evolving infrastructure.
