In one of the most aggressive regulatory actions against cryptocurrency mining to date, Chinese authorities ordered the shutdown of Bitcoin mining operations in Sichuan Province on June 18, 2021, a move that effectively eliminated more than 90% of the country’s mining capacity and sent shockwaves through the global crypto market.
TL;DR
- Sichuan Provincial Development and Reform Commission and Energy Bureau issued a joint notice ordering mining shutdowns by June 20
- 26 firms were specifically named and inspected as potential cryptocurrency mining enterprises
- Chinese mining pools saw real-time hash rates plunge 20-40% within 24 hours
- Bitcoin dropped 7% to approximately $35,400, with Ethereum declining a similar margin to around $2,230
- China previously hosted roughly 75% of the world’s Bitcoin mining capacity
The Sichuan Order
The Sichuan Provincial Development and Reform Commission and the Sichuan Energy Bureau issued a joint notice on Friday, June 18, directing local electricity companies to “screen, clean up and terminate” all cryptocurrency mining operations within the province by Sunday, June 20. The notice specifically listed 26 companies that had been inspected and reported as potential mining enterprises, including Heishui Kedi Big Data Tech Co. and Kangding Guorong Tech Co.
Local electricity companies were ordered to immediately stop supplying power to any detected crypto mining projects, conduct self-inspection and rectification, and report their results by the following Friday. The notice also banned local authorities from approving any new mining projects going forward.
A Province-Level Crackdown Goes National
Sichuan had long been considered one of China’s largest cryptocurrency mining hubs, thanks to its abundant and inexpensive hydropower, particularly during the rainy season. Some industry participants had hoped that regulators in Sichuan would take a softer approach compared to other provinces. Those hopes were dashed with the June 18 order.
Northwest China’s Xinjiang Uygur Autonomous Region, North China’s Inner Mongolia Autonomous Region, and Southwest China’s Yunnan Province had all previously announced rules curbing Bitcoin mining. With Sichuan joining the crackdown, the regulatory net effectively covered all major mining hubs in the country.
China had hosted approximately 75% of the world’s Bitcoin mining capacity, making this coordinated provincial action a seismic event for the network. Industry analysts estimated that more than 90% of China’s Bitcoin mining capacity would be shuttered, at least in the short term, removing roughly one-third of the global crypto network’s processing power.
Immediate Market Impact
The news triggered immediate selling pressure across the cryptocurrency market. Bitcoin fell 7% to approximately $35,431, while Ethereum declined a comparable margin to around $2,231. Chinese mining pools backed by major companies, including Huobi Pool, Binance, and AntPool, experienced a 20% to 40% plunge in their real-time hash rates within just 24 hours of the announcement.
For on-the-ground miners, the situation was chaotic. A Sichuan-based industry insider, speaking on condition of anonymity, described a scramble to find overseas mining facilities to host their equipment, noting that many miners had already suffered significant losses. The price of mining equipment was also expected to fall sharply as operations liquidated hardware.
The Great Miner Migration
The crackdown catalyzed what industry observers would later call “the great miner migration.” With operations forced to cease across China, mining companies began exploring relocation to jurisdictions with more favorable regulatory environments, particularly in North America and Russia.
Shentu Qingchun, CEO of Shenzhen-based blockchain company BankLedger, noted that Chinese miners would need to form alliances to migrate overseas. However, the transition would not be seamless — the logistics of moving industrial-scale mining operations across continents presented enormous challenges in terms of cost, timeline, and infrastructure availability.
Why This Matters
The Sichuan mining shutdown of June 18, 2021, represented a watershed moment in Bitcoin’s history. It fundamentally altered the geographic distribution of mining power, accelerated the decentralization of the network away from a single country’s dominance, and demonstrated that regulatory risk remains one of the most significant threats to cryptocurrency markets. The resulting drop in network hashrate temporarily slowed Bitcoin transaction processing and highlighted the fragility of relying on any single jurisdiction for critical infrastructure. In the months that followed, the migration of mining operations to North America, particularly Texas and other energy-rich states, would reshape the industry’s landscape permanently.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Cryptocurrency investments carry significant risk. Past market events do not guarantee future results.
i was mining in sichuan when this dropped. had 48 hours to shut everything down. the chaos was unreal
26 firms named specifically and they gave them 2 days. that was never about regulation, it was about control
2 days for 26 firms. the speed told you this was planned well before june 18. they just needed the political cover
26 firms named in the sichuan notice and 48 hours to shut everything down. i was running 200 antminers in panzhihua and had to sell them at 15% of cost
colin M. 2 days for 26 firms means beijing sent the order weeks before the provincial notice. sichuan energy bureau was just the delivery mechanism. the decision was made in may not june
Ling Y. beijing gave the order in may not june explains everything. the provincial notice was theater. China never does sudden policy shifts without months of internal planning
48 hours to shut down years of infrastructure. mining mike is right, it was pure chaos on the ground
48 hours to dismantle months of infrastructure. miners were literally selling ASICs on the side of the road
Baatar T. miners selling ASICs on the roadside was surreal. picked up three Antminers for 20% of retail in Chengdu that week. wild times
china going from 75% of global hashrate to near zero in weeks reshaped mining geography forever. kazakhstan and texas were the real winners
texas yes, but kazakhstan had its own crackdown within a year. the real winner was north america long term
kazakhstan was a temporary haven until their power grid couldnt handle it. the real migration was to north america and iceland
everyone fled to kazakhstan and crashed their power grid within 6 months. the sichuan ban just moved the problem east without fixing anything
kasakh_grid everyone focuses on kazakhstan but mongolia quietly absorbed a bunch of displaced sichuan miners too. power was cheap and nobody was checking for a while
kazakhstan power grid wasnt built for mining loads. the rolling blackouts in 2022 proved that hosting miners and a stable grid dont mix
sichuan had the cheapest hydro in china. when they pulled the plug on those 26 firms it wasnt just hashrate lost, it was the most efficient mining infrastructure on earth going dark. btc to 35400 was the market realizing this
watching pool hash rates drop 20-40% in real time was surreal. i was mining on F2Pool and the dashboard just went red overnight
hash rate plunging 20-40% within 24 hours on chinese pools. watching the f2pool and antpool numbers drop in real time was surreal
the f2pool dashboard going red overnight was something else. i was monitoring a small operation in yunnan and watched our whole hash rate vanish in 2 hours
26 firms named and 48 hours to comply. that was never regulation, it was an execution order dressed up as policy
the 90% hashrate drop reshaped the entire mining industry. within 18 months North America went from bit player to dominant force. China handed away a strategic asset
Chimwemwe Banda calling it a strategic asset is spot on. china literally handed texas and kazakhstan a multi-billion dollar industry on a plate
48 hours notice and 90 percent of national hashrate gone. the speed of the Sichuan shutdown was breathtaking. miners in Xinjiang got a heads up but Sichuan ops were completely blindsided