Experts predicted the relocation of large foreign miners to Russia

Experts predicted the relocation of large foreign miners to Russia

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Author: Robert Strickland (crypto expert)
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Experts predicted the relocation of large foreign miners to Russia

Experts predicted the relocation of Bitcoin miners from the U.S., Canada, China, and Kazakhstan to Russia

In this regard may play several factors out - the low cost of electricity, the availability of reserves of free capacity, and a favorable ruble exchange rate.

 

Russia has every chance to increase its leadership in the field of mining cryptocurrencies. According to the estimates of Intelion Data Systems experts, Russia's share in the global Bitcoin hash rate may reach 18%.

 

Against the background of the U.S. and European banking sector crisis, the demand for Bitcoin as an alternative hedging instrument increased, which, in turn, increased interest in cryptocurrencies from traditional financial institutions. Expecting this trend to continue, experts predict the emergence of major players in the market, investing in cryptocurrencies, and, as a consequence, the growth of global mining.

 

According to Cambridge University, Russia accounted for 4.7 percent of the global bitcoin hash rate at the beginning of 2022, ranking fifth among countries with cryptocurrency mining. Harsh policies in the field of mining cryptocurrencies in other states, including restrictions on access to electricity and increasing its cost, as well as the introduction of a high taxation mechanism, may entail the relocation to Russia of up to 6% of the global mining capacity from the United States, Canada, and China, as well as about half of Kazakh miners. In such a scenario, Russia's share of the global Bitcoin hash rate could rise to 18%. According to experts, for Russia, it will amount to 3.95 GW of power at an average cost of 128 billion rubles.

 

"We expect that Russia has every opportunity to change the existing hierarchy of the global cryptocurrency mining market. The country has everything necessary for this: low electricity costs, spare capacity reserves, developed energy infrastructure in many regions of the country, as well as government support and increased efforts of a number of companies," said Intelion Data Systems CEO 

 

Considering that a significant share in the structure of the costs of mining accounts for payment for electricity, Russia, which has quite low tariffs, looks like the most attractive place to locate crypto-farms. Currently, low electricity prices and a surplus balance between electricity generation and consumption exist in the Irkutsk, Sverdlovsk, and Murmansk regions, the Republic of Khakassia, and the Krasnoyarsk Territory. The volume of generation in these regions is sufficient not only to meet the current demand but also to connect additional consumers without overloading the grids, the company's representatives say.

 

To create a favorable investment climate, mining in Russia should become fully legitimate and move to the zone of "legal business activity with clear rules of the game. According to experts, the adoption of regulatory acts to regulate the mining of cryptocurrencies and digital assets will also allow all market participants to fix the rules of functioning of the fast-growing sector of the economy, which will lead to significant positive shifts at a macro level: the growth of highly skilled employment, the development of related industries and further digitalization of the economy.

 

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