How China’s Recent Mining Policies Impacted Bitcoin Decline?

Bitcoin has recently faced a significant decline, and experts point to China’s new restrictions on domestic mining as a central factor. While many factors affect its price, the sudden halt in mining had wide effects on the market.

In Xinjiang province alone, about 400,000 miners went offline almost overnight. This stopped income and forced some miners to sell Bitcoin to cover costs or move equipment.

How Mining Disruptions Intensify Market Pressure?

When a large part of mining capacity goes offline, the impact goes beyond lost hash power. Former Canaan chairman Jack Kong said China’s computing power fell by about 100 exahashes per second in just 24 hours, a drop of around 8%. This happened as Bitcoin fell below $90,000, adding pressure to an already fragile market.

Bitcoin Hash Rate Falls by Most Since 2024 Halving

Ex-Chairman of $CAN says 400k BTC mining machines shut off in China https://t.co/4RQ0O2esh3 pic.twitter.com/q5OopJq10M

— matthew sigel, recovering CFA (@matthew_sigel) December 15, 2025

Mining activity plays a crucial role in maintaining price stability. It ensures transaction verification and reinforces market confidence. When miners face sudden problems, they often sell holdings to stay operational, which can push prices down.

This has happened before. China’s mining crackdowns in 2021 caused short-term volatility. After a brief recovery of domestic mining, this year’s sudden drop shows how quickly changes in policy can affect the global market.

How Mining Shutdowns Affect Bitcoin?

Bitcoin analyst NoLimit noted that forced shutdowns set off a chain reaction. Miners abruptly lose income and need immediate liquidity to cover costs or move operations. Often, selling Bitcoin becomes unavoidable, adding extra supply to the market.

🚨 BITCOIN IS CRASHING AND THIS IS THE REASON WHY!!!

Bitcoin is down today for a very simple reason, and almost nobody is explaining it properly.

It’s coming straight from China, and the timing matters.

That’s right, china’s crashing bitcoin, AGAIN.

Here’s what’s happening:… pic.twitter.com/RV3k9JzA0T

— NoLimit (@NoLimitGains) December 15, 2025

When about 8% of the global hash rate disappears overnight, uncertainty rises. Investors act cautiously, causing short-term price swings.

These events also show that mining disruptions do not only affect miners. They spread through liquidity networks, shaping broader trading activity and short-term market stability.

The Impact of New Regulations on Domestic Miners

By October, China had regained a key role in global mining, producing almost 14% of worldwide hash power. Underground operations in areas with low electricity costs helped the sector recover despite the 2021 ban.

The latest crackdown, however, surprised many miners. New rules caused a sharp drop in hashrate, cutting revenues that were already affected by Bitcoin’s 30% fall from October and low transaction fees. Mining profits, which depend on price and efficiency, quickly became a major concern.

This shows how regulatory changes can outweigh economic benefits. Even in areas with cheap power, miners face serious risks if rules change. Since mining supports Bitcoin’s security and transactions, the impact on price is clear and immediate.

What Does It Mean for BTC?

Recent mining issues in China are increasing short-term price swings for Bitcoin. Many miners have less revenue, and some are selling, adding pressure on the market. This can make price swings bigger and create more uncertainty for traders. While the full consequences could take time to show, BTC's recent price drop matches problems in global mining.