For years, the map of Bitcoin mining has been drawn by three giants: the United States, Russia, and China. American supremacy remains undisputed, but the battle for the silver medal is undergoing a historic reversal. The combination of suffocating operational costs, an increasingly hostile regulatory environment, and the unexpected resilience of China’s underground mining industry points toward a scenario unthinkable just two years ago: Russia could lose its position as the world’s second-largest mining power to a China that, technically, still bans the activity.
The most recent figures paint a technical tie loaded with tension. The gap that once separated the two nations has narrowed to a minuscule margin, and projections for this very year indicate that the overtaking is not only possible, but increasingly likely. We are witnessing a changing of the guard in the geopolitics of hashrate, where two antagonistic models collide: Russian state interventionism versus Chinese underground adaptability.
The Narrowing Gap: When Numbers Speak
To grasp the magnitude of this shift, one need only look at the evolution of the hashrate—the computing power dedicated to securing the Bitcoin network—over the last quarter. The United States leads comfortably, commanding around 37.5% of the global total, equivalent to roughly 400 exahashes per second (EH/s), a figure that remains stable. The duel is happening on the lower rungs.
In the fourth quarter of 2025, Russia held a 15.5% share of the global total with 160 EH/s, while China stood at 14.1% with 145 EH/s. Just a few months later, at the beginning of 2026, the landscape has shifted. Russia’s share is estimated in a range of 13% to 17%, but its computing power has stalled at around 175 EH/s, which effectively means zero growth.
China, though volatile, has demonstrated an astonishing capacity for recovery, and the difference between the two countries has narrowed to just 4.7 percentage points. In absolute terms, we are talking about a distance that could evaporate in a matter of weeks if the right conditions arise.
This convergence is not just due to a hypothetical Chinese takeoff, but also to a perfect storm that is undermining the foundations of the Russian mining industry.
The Perfect Storm in Russia: Prohibitive Costs, a Strong Ruble, and Surveillance Drones
Russia legalized cryptocurrency mining in late 2024, a move that was initially interpreted as a major boost for the sector. However, the subsequent reality has been very different. The regulations have been accompanied by a barrage of restrictions that have turned the mining dream into a nightmare for thousands of operators.
The first major obstacle is the cost of electricity, which is the most important operational expense for any miner. While the global average for profitable mining sits between $0.03 and $0.04 per kilowatt-hour (kWh), grid power prices in Russia have surpassed the $0.06/kWh barrier in many regions. Added to this is a second macroeconomic factor that erodes profitability: the strength of the ruble. Russian miners pay their local expenses in rubles, while their revenue is generated in Bitcoin. A strong ruble means each Bitcoin mined translates into less local currency to cover payrolls, rents, and bills, squeezing already tight margins.
But the most severe blow has come from the Kremlin itself. Despite legalization, the government has imposed seasonal and even year-round mining bans in at least ten regions, effective until 2031. Iconic areas known for cheap energy, like Irkutsk, have been directly affected. Authorities estimate these measures target a universe of up to 50,000 miners, and enforcement has reached unprecedented levels: drones are being used to detect illegal farms from the air, and raids have been carried out on facilities that operated under the old permissiveness.
The immediate result is an exodus of miners toward friendlier jurisdictions, such as Kazakhstan or even certain regions in the Middle East. Those who stay often operate with outdated, less efficient hardware, further reducing their competitiveness. The combination of all these factors has caused Russia’s computing power, which once grew at double-digit rates, to be technically stagnant today.
China, the Dragon That Never Gave Up
On the other side of the scale, China embodies the paradox of an industry that thrives in the shadows. The Asian giant has maintained an official ban on cryptocurrency mining since 2021, a decision that at the time emptied entire provinces and shifted the center of gravity of the hashrate toward the United States for the first time. But, far from disappearing, Chinese mining has transformed into a clandestine network that is remarkably resilient.
Several structural factors explain this survival. First, the existence of energy surpluses in provinces like Xinjiang, where more electricity is produced than can be exported. That energy, which would otherwise go to waste, becomes a practically free resource for miners who manage to operate discreetly. Second, the overinvestment in data centers that occurred during the years of the tech boom has left vacant infrastructure that is now recycled to house mining machines away from official scrutiny.
Furthermore, there are signs of a pragmatic shift in Beijing. Although the formal ban remains in place, the promotion of Hong Kong as a crypto-assets hub has created a more permissive atmosphere that seeps into the mainland. A revealing statistic is that domestic sales of mining equipment manufactured by Chinese companies have skyrocketed in recent quarters—an unmistakable sign that activity on the ground is not only being maintained but is expanding.
Of course, China’s underground mining is not immune to shocks. In the first quarter of 2026, a regulatory compliance campaign in Xinjiang disconnected around 1.3 gigawatts of capacity, representing a loss of about 20 EH/s and a temporary drop in China’s share to 11.7%. Nevertheless, organizations like the International Energy Agency point out that this volatility, far from demonstrating weakness, confirms the persistence of underground operations that adapt to each new regulatory blow. After each crackdown, the Chinese network reconfigures itself, migrates to other provinces, or reduces its exposure, but it rarely shuts down completely.
A Clash of Models: Interventionism versus Adaptability
The impending overtaking is not just a matter of numbers, but a clash between two conceptions of the state’s role. Russia has opted for iron-fisted control that, in theory, sought to organize the sector and protect its electrical grid, but in practice is driving operators away. The ban on mining in regions that for years concentrated the activity has shattered the ecosystem without offering viable alternatives. Meanwhile, Russian miners bear the burden of rising energy costs and a currency market that works against them. Formal legality, in this case, has become a bureaucratic trap.
China, by contrast, plays its cards with ambiguity. Its official ban allows the state to distance itself from the financial and energy risks associated with cryptocurrencies, while at the same time tolerating—or at least not persecuting with sufficient force—a mining network that exploits the loopholes in the system. This model gives Chinese miners a flexibility that their Russian counterparts lack: they can move where cheap energy is, relocate equipment quickly, and, above all, they do not have to bear the weight of regulation designed to restrict, not to promote.
The result is a historical irony. Chinese mining, declared illegal, could dethrone that of a Russia that legalized it with the intention of becoming a world leader. Forecasts for the remainder of 2026 suggest that, if current trends hold, China is well positioned to formally seize second place. Even if the overtaking is not immediately reflected in official statistics (given the opaque nature of Chinese operations), the actual computing power under the Chinese flag very likely already surpasses that of Russia in moments of lower regulatory pressure.
A New Order in Global Mining
The Russia-China duel for the second rung of the mining podium is much more than a statistical curiosity. It reflects the tensions of an industry that has become a first-rate geopolitical asset, where states compete to attract—or expel—an activity that consumes enormous amounts of energy and moves billions of dollars.
Russia faces a monumental challenge: if it does not reverse the rise in energy costs, rethink its geographical restrictions, and offer a horizon of stability to operators, its market share could deflate in favor of a China that, even under a ban, has demonstrated an astonishing capacity for survival. The paradox is complete: legal mining is fading, while the underground thrives. In the great global Bitcoin race, the dragon may be about to reclaim the position it never fully abandoned.
