China's massive power empire's impact on cryptocurrencies (especially mining) presents an extreme contradiction between "strong physical infrastructure" and "high-pressure policy regulation." This contradiction not only reshapes the global hash rate landscape but is also changing the survival logic of the mining industry.

1. Physical Infrastructure: The "Magnetic Effect" of Cheap Electricity
From an energy endowment perspective, China fully possesses the hardware strength to dominate global crypto mining:
Cost Advantage: Hydropower during flood seasons in Sichuan and Yunnan, as well as thermal/wind power in Xinjiang and Inner Mongolia, provide highly competitive cheap electricity worldwide. Theoretically, this is the "money-printing machine" environment that miners dream of.
Hidden Reflows: Although the hash rate outflow occurred after the comprehensive ban in 2021, data from HashrateIndex and others show that by 2026, China's Bitcoin hash rate share has quietly rebounded to 14%-20% (third globally). This mainly results from local tolerance of "abandoned water and light" electricity and corporate illegal power supply transfers (e.g., cases where polysilicon factories were fined).
2. Policy Reality: The "Exclusion Effect" of AI and Green Transition
The "AI computing power competition" you mentioned is a key variable. China's electricity is abundant, but policy guidance clearly prioritizes "support AI, abandon mining":
Regulatory Pressure: In February 2026, eight departments including the central bank upgraded regulations again, listing mining as a "phased-out" industry, strictly prohibiting new projects, and imposing hefty fines for illegal power supply (e.g., Xinjiang companies fined 100 million yuan).
Resource Competition: AI data centers and computing infrastructure are classified as new productive forces, enjoying policy and grid priority. The cheap green electricity and land resources that might have flowed to mining farms are now being siphoned by the "East Data West Computing" project and AI intelligent computing centers. Miners cannot compete with AI at the compliance level.
3. Specific Impacts on the Cryptocurrency Market
Hash rate Migration and Cost Increase: A large number of mining machines are forced to move to the Middle East, North America, or Central Asia, leading to the de-Chinaization of global hash rate centers, and miners face higher compliance and construction costs.
Selling Pressure and Transition: During bear markets (such as Bitcoin falling from its peak in 2026), high electricity costs force miners to sell Bitcoin to maintain cash flow. Leading mining companies (like Core Scientific) even liquidate BTC and convert mining farms into AI data centers, further reducing long-term holding support for the market.
Network Decentralization: Hash rate redistributes globally, reducing the risk of China's power fluctuations concentrating the entire network's hash rate.
Summary
China's power empire could easily support the global crypto mining industry, but under the dual national policies of "AI priority" and "financial security," cryptocurrency mining in China has shifted from a "legitimate industry" to a "target for crackdown." This not only raises the marginal costs of mining worldwide but also forces the industry to transition to compliant green energy regions. For coin holders, this means an increase in mining costs (production costs), which could lead to greater downward pressure on prices during bear markets. #Gate广场四月发帖挑战