In recent days, the crypto world has been shaken by reports of mass shutdowns of Bitcoin mining operations in China’s Xinjiang region. According to a statement from Kong Jianping, former co-president of Canaan Inc. and current founder and CEO of Nano Labs, about 400,000 Bitcoin mining devices have been switched off, cutting global hashrate by roughly 8%, or 100 EH/s.
Details of the Event
Kong Jianping, cited in industry reports, said the shutdowns are driven by compliance checks and shutdowns in the Xinjiang region. Many older machines have become unprofitable in the face of these regulatory actions. The drop in hashrate is a direct result of these operations, as confirmed by analysis of Bitcoin network data. Sources indicate that mining operations in Xinjiang, known for their low energy costs, were a key element in the revival of mining in China after the 2021 ban.
According to a report by Wu Blockchain, citing a representative of Nano Labs, which is listed on Nasdaq, the main causes are the closures of Bitcoin mining farms in Xinjiang. The exact reasons for the shutdowns have not been fully disclosed, but it is speculated that they may be linked to new environmental or political regulations.
Historical Background
China has a turbulent history with Bitcoin mining. In 2021, the Chinese government imposed a full ban on cryptocurrency mining, triggering a mass exodus of miners to other countries such as the United States and Kazakhstan. However, in recent years mining has begun returning to China, taking advantage of cheap energy in regions such as Xinjiang and Inner Mongolia. According to a Reuters report from November 2025, despite the ban, individual and corporate miners are using cheap energy, allowing China to regain its position in global hashrate.
In November 2025, the media reported renewed mining activity in Xinjiang, which contrasts with the current shutdowns. This shows the regulatory instability in China, where policy toward cryptocurrencies remains strict despite occasional signs of a thaw.
Market Implications
The 8% drop in hashrate may have short-term consequences for the security of the Bitcoin network, although historically the network has recovered quickly thanks to miner migration. Retiring older machines may speed up hardware upgrades, which over the longer term will improve energy efficiency. For investors, it is a reminder of geopolitical risk in the crypto sector, particularly given its dependence on Chinese infrastructure.
Analysts note that the Xinjiang closures may be part of a broader compliance campaign, which could affect global energy prices and the availability of mining hardware. Nano Labs, as a chip maker, may benefit from demand for more advanced devices.
The closure of mines in China is another chapter in the complicated relationship between Beijing and the cryptocurrency world. Despite the 2021 ban, mining kept returning, but current actions show that the authorities continue to monitor and intervene. The crypto market will watch whether this is an isolated incident or the start of a wider wave of regulation.
