When China kicked out all of its bitcoin miners, they had to seek a new hub. Naturally, they were heading for the second-largest mining destination on the planet. In a jiffy, the US eclipsed China, having become the new mining mecca for bitcoin mining. On top of that, miners’ income hit new record highs. However, they faced a serious problem: a shortage of semiconductors.

In late May of 2021, Liu He, the Vice Premier of the State Council of the People's Republic of China, announced the decision of the government to take harsh measures against crypto mining and BTC trading. Following Liu He's statement, Xinhua, the official government news agency, released articles severely criticizing digital currencies and bitcoin mining.

Shortly after, China imposed strict laws on the crypto industry. In the Chinese provinces of Xinjiang, Qinghai, and Yunnan, all crypto mining operations were banned. In Sichuan, miners were ordered to stop working until June 20, 2021. Local energy companies were also prohibited from supplying electricity for crypto mining operations.

Usually, from May to October, some forward-looking bitcoin miners in China used to stock up on mining rigs in Sichuan thanks to the cheap electricity in the wet season there. In the period of high water, the cost of electricity there was quite low. At that time, the productivity of local power plants was at its peak. They took full advantage of abundant and cheap hydroelectric energy.

The ban of the Chinese authorities on crypto mining is also associated with environmental problems. By 2060, Beijing intends to achieve carbon neutrality. Therefore, China needs to shut down some industries that considerably pollute the environment. Therefore, the government cracked down on heavy industry enterprises as well as mining farms. According to preliminary estimates, China will surpass the Philippines in terms of greenhouse gas emissions in the next three years due to the buoyant work of mining farms.

Interestingly, when assessing the main sources of carbon dioxide emissions, the harm from crypto mining is not estimated separately. Naturally, it makes it almost impossible to make appropriate calculations as well as assess the impact of mining farms on China’s emission and carbon budget. Analysts believe that it is crucial to limit bitcoin mining in coal-mining regions in order to partially tackle the problem of harmful emissions.

The decision to ban crypto mining operations in China led to a massive exodus of miners to other countries. In July 2021, more than 90 percent of China's bitcoin mining capacity was estimated to be shut down. Miners migrated mainly to the US, Canada, and Kazakhstan.

According to the Cambridge University Center for Alternative Finance (CAE), in August 2021, the US became the world's leader in bitcoin mining, leaving China far behind. Since May last year, the US share of the total hashrate has risen to 35.4% from 17.8%.

During the reporting period, many countries have been able to increase their shares in crypto mining. The share of Canada was 9.6%, notching an increase from the previous 4.7%. Russia’s share amounted to 11.2%, up from 7.2%. In this rating, Russia took third place.