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Russia May Take Up 18% of Bitcoin Hashrate in Next Big Migration of Crypto Miners, Experts Say – Mining Bitcoin News
Rising regulatory pressures, tax burdens and energy costs in countries such as the US and Kazakhstan are likely to result in another large migration of crypto miners, Russian analysts believe. Under such a scenario, Russia has what it takes to occupy up to 18% of the global bitcoin hashrate, they claim.
Russia could attract half of Kazakhstan’s cryptocurrency miners
The Russian Federation has a chance to increase its lead in cryptomining, against the backdrop of negative developments for the industry elsewhere. According to specialists from Intelion Data Systems, a major Russian importer and distributor of mining hardware, the country’s share of the Bitcoin hash rate could potentially reach 18%.
As of January 2022, Russia accounted for nearly 4.7% of the global hashrate, according to calculations by the Cambridge Center for Alternative Finance, ranking fifth among major mining destinations. However, the tightening of policies towards the sector in the leading countries could trigger another large migration of miners, similar to the one that followed China’s crackdown on the sector in 2021.
New restrictions on access to low-cost energy amid rising electricity prices and the introduction of higher taxes could mean moving to Russia up to 6% of mining capacity in the US, Canada and China, as well as about half of miners from Kazakhstan, the Intelion team estimated, cited by the crypto site of the Russian business news portal RBC.
In this case, Russia’s share in the global Bitcoin hash rate could rise to 18%, which would amount to 3.95 GW of power consumption with an average cost of 128 billion rubles (almost $1.7 billion). In April, the leading Russian mining operator, Bitriver, estimated that Russia has already climbed to second place in terms of total power capacity of the facilities engaged in the mining of digital currencies. Timofey Semyonov, CEO of Intelion Data Systems, commented:
Russia has every opportunity to change the existing hierarchy of the global crypto mining market. The country has everything you need for this: low electricity costs, reserves of spare capacity, developed energy infrastructure in many regions.
Semyonov also highlighted the increased efforts of a number of Russian companies to expand their operations as well as government support for industry. While lawmakers have yet to pass the long-awaited mining legislation, official statements in Moscow have indicated that Russian authorities intend to exploit what President Putin described as Russia’s “competitive advantage” as a mining hotspot.
In order to create a favorable investment climate, mining in Russia must become a “legal business activity with clear rules of the game”, the experts from Intelion also said. They believe that the crisis in the banking sector in the US and Europe, which is “just beginning”, will lead to a growing demand for bitcoin as a hedging tool and interest in crypto among traditional financial institutions, which should result in increased global mining. volumes.
Do you agree that Russia has the potential to become a leading crypto mining destination? Tell us in the comments section below.
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