Recently, the cryptocurrency market has been turbulent, with Bitcoin prices facing pressure again after a brief consolidation. Behind this wave of market fluctuations, news from China is rapidly fermenting, becoming the focus of attention for the global crypto community: rumors suggest that large-scale Bitcoin mining sites in Xinjiang have undergone a new wave of centralized shutdowns, leading to a steep decline in Bitcoin's total network hash power. This event not only directly impacts the survival status of miners but has also triggered a chain reaction regarding market selling pressure, hash power migration, and regulatory policies globally.
The event's trigger point began around December 14, 2025. Various data shows that Bitcoin's total network hash power experienced a dramatic 'earthquake' within a short 24 hours. Jack Kong, former chairman of mining machine manufacturer Canaan, first disclosed on social media that Bitcoin's total network hash power plummeted by about 100 EH/s, with a drop of up to 8% to 10%. He estimated, based on the average hash power of a single mining machine being about 250 TH/s, that at least 400,000 Bitcoin mining machines ceased operations in a very short time.
This astonishing figure has been corroborated by third-party data platforms. Data from both CoinWarz and Blockchain.com shows that Bitcoin's total hash power plummeted from a previous high of about 1.1 to 1.2 ZH/s to a level of 900 EH/s. Matthew Sigel, head of digital asset research at asset management giant VanEck, pointed out that this is the most severe single-day drop in network hash power since Bitcoin's 'halving' in April 2024.
Although, as of now, relevant personnel in Xinjiang have not responded to this matter, leaving the authenticity of this 'shutdown wave' shrouded in a layer of fog, the high overlap of the timing, as well as the simultaneous decline in hash power related to Chinese miners, has led the market to generally point fingers at Xinjiang. Jack Kong bluntly stated that the successive shutdowns of mining sites in Xinjiang can be described as 'America winning again', implying another geopolitical shift in global mining hash power.
The sudden evaporation of hash power quickly transmitted its impact to the price level of Bitcoin. Shortly after the news of the hash power crash broke, Bitcoin's price fell sharply, breaking through the key support level of $90,000 that had been maintained for several weeks, dipping to around $86,000.
Analysts generally believe that this price drop is not merely a simple fluctuation of market sentiment; there exists a more direct 'forced selling pressure' behind it. When mining sites are forcibly shut down, miners' income sources are abruptly cut off. For these heavy asset-operating companies, this means not only losing future revenue but also facing an imminent liquidity crisis. To cover daily operating costs, employee wages, or to raise funds for their next cross-border migration, they have no choice but to sell their Bitcoin reserves.
This sell-off driven by survival pressure is referred to by market observers as 'non-emotional' selling pressure. It differs from trading behavior driven by panic or speculation and stems from real financial needs, making the willingness to sell more resolute. On-chain data analysis indicates that this selling pressure from miners and some long-term holders (especially the 'OG Whales' in Asia) has formed a massive supply flow in the market.
An interesting phenomenon is that regional trading data shows a clear divergence. U.S. exchanges like Coinbase continue to record net buys, indicating that U.S. institutional investors are quietly accumulating Bitcoin. However, this buying power is offset by stable net sells from Asian exchanges (such as Binance, Bybit, OKX, etc.). In short, a sell-off triggered by the shutdown of Chinese mining sites is fiercely competing with institutional buys from the West, and currently, the balance temporarily favors the sellers, thus suppressing the upward potential of Bitcoin prices.
It is worth noting that to understand the background of this incident in Xinjiang, one must review China's fluctuating regulatory history regarding the Bitcoin mining industry.
Looking back to 2019, China was the absolute leader in global Bitcoin mining, with its hash power accounting for 75.5% of the global total at one point. However, 2021 became a fundamental turning point. In September of that year, the National Development and Reform Commission of China and 11 other departments jointly issued a notice categorizing virtual currency 'mining' activities as an industry to be phased out, launching a sweeping crackdown nationwide. Major mining sites in Inner Mongolia, Sichuan, and Yunnan, once mining hubs, were shut down one after another, and China's share of Bitcoin hash power nearly dropped to zero in a short period.
However, mining activities have not disappeared completely in China. Thanks to cheap electricity resources and surplus energy capacity in some regions, underground mining activities have quietly revived in the past few years. Just a month before this shutdown event occurred, data from Reuters and Hashrate Index showed that China had quietly returned to its position as the world's third-largest Bitcoin mining center, occupying about 14% of the global hash power, with Xinjiang and Sichuan as the main gathering places.
This situation of 'wildfires that cannot be completely extinguished' has evidently touched the nerve of regulators again. On November 28, 2025, the People's Bank of China convened a meeting with the Supreme Court, the Ministry of Public Security, and 13 other government departments, reiterating that it will continue to strengthen efforts to crack down on activities related to cryptocurrencies. The tightening signal released from this high-level meeting may be the prelude to the precise 'pulling of the plug' action in Xinjiang mining sites. This event can be viewed as a 'return fire' of China's regulatory policy, aimed at eliminating those underground mining forces that have resurged since the ban in 2021.
The shockwave from Xinjiang's hash power again highlights a long-standing core issue of the Bitcoin network: political risk. Although the Bitcoin network is designed to be decentralized, its physical infrastructure—mining machines and mining sites—cannot escape the constraints of geography and policies in the real world.
Every tightening of regulation in China has objectively promoted the diversification of global mining hash power. If the shutdown in Xinjiang becomes a settled fact and continues, this part of the displaced hash power will undoubtedly embark on the migration path again. North America, the Middle East, some Latin American countries, and even some emerging markets will become potential destinations for this hash power. Although the operating costs in these regions may be higher, they have clearer legal frameworks and more stable policy expectations, making them highly attractive for mining companies seeking long-term development. For example, U.S. mining companies like Hut 8 and American Bitcoin, associated with the Trump family, are actively expanding their infrastructure to prepare for the benefits of this hash power transfer.
For the Bitcoin network itself, this short-term hash power shock will not shake its security foundation. The built-in 'difficulty adjustment' mechanism of the Bitcoin protocol will come into play. As hash power declines, block times will lengthen, and the network will automatically lower mining difficulty in the next cycle (expected to decrease by about 3%). This will provide a breathing space for those well-funded surviving miners who can weather the winter, as their unit hash power earnings will improve, allowing them to gain a larger share after the market clears.
In summary, the rumors of the shutdown of the Xinjiang mining site have created ripples from network hash power to market prices and to the global industrial landscape, like a stone thrown into a calm lake. It reveals the intricate connections between macro policies, geopolitical factors, and microeconomic behaviors in the Bitcoin market. Although the market is currently under selling pressure, in the long run, this may be a necessary pain for the Bitcoin mining industry to move towards a more decentralized and resilient global layout. In the future, political and regulatory risks will continue to profoundly shape the industry's landscape, just like price and energy costs.
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