Bitcoin and the entire crypto market are bleeding as a result of the many challenges that have befallen the industry. From the Terra crash and continued rate hikes to FTX implosion, the market has not enjoyed a full month of positive price performance.
While the investors cry over the loss of investment funds, Bitcoin miners struggle to stay afloat. As a result, the BTC price has continued to fall even with the rising electricity costs for miner operations. But surprisingly, many miners in Russia will now buy mining rigs.
Why Are Russian Miners Buying Bitcoin Mining Rigs?
According to Kommersant’s recent reportAre many miners in Russia grabbing more Bitcoin rigs in Q4 of 2022. In addition, the researchers found that sales of ASIC rigs skyrocketed at the end of the year. This is surprising given the continued decline of crypto assets in the market.
Upon closer inspection, it became clear that Russian miners have cheaper electricity costs. In addition, the country provided more affordable electricity to many regions, making it easier for households and businesses in those places to prosper. So while other miners in countries with high energy costs are struggling, their Russian counterparts are more accessible.
Another reason to collect more ASIC crypto mining rigs is because of the cheap offerings for the equipment. As a result, ASIC prices in the country fell, prompting many miners to act to acquire more.
Another reason that led to this wave of mining rig purchases was the increasing interest in crypto mining as a viable investment opportunity. According to Xive co-founder Didar BekbauovBitcoin mining became attractive due to fewer investment opportunities, sanctions, and the high-tech qualifications of many people in the country.
The buying spree began after the Ministry of Finance of the Russian Federation (MiFin) and the Bank of Russia (BoR) agreed to support crypto mining. But they allowed it in regions with more energy allocations, not in regions with scarce energy supplies.
Second, Russian regulators have introduced a bill to legalize mining and the sale of mining assets in the country. This bill was discussed in the Russian Duma, the lower parliament.
Also, financial analyst Vladislav Antony stated that the lower price of ASIC mining rigs, which are now close to production costs, is a good encouragement for new investors. Mining revenues in Russia have been rising recently, even as BTC prices are at a nearly two-year low.
Sales report suppliers of mining installations
One of the distributors of mining equipment in Russia, Chikot, recorded more sales in October and November. This was different from their Q3 records.
Data shows that Chikot sales in Q1 to 3 were 65% higher than in 2021. In August and October 2022, the hardware price fell by almost 20% and remained the same in the following months.
As a result, Chikot even registered a 30% increase in mining equipment purchases in a single transaction, different from the records set in early 2022.
Featured image from Pixabay, chart from TradingView.com