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.
was running 400 S9s in kangding when the order came down. had 48 hours to shut everything off. people forget sichuan hydropower was keeping global electricity costs for mining absurdly low
btc dipped 7% to 35400 and recovered within a week. the real damage was to miners who couldnt move fast enough. kazakhstan got flooded with hardware overnight
the 26 named firms is the detail nobody talks about. they had a literal hitlist. heishui kedi and kangding guorong were the biggest and everyone in the area knew it
90% of national hashrate gone and the network barely flinched long term. says everything about bitcoins resilience that sceptics still dont grasp