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With the crypto market rally pushing Bitcoin (BTC), Ether (ETH), and other digital currencies to their new all-time highs, mining cryptocurrencies is getting more and more lucrative. Russia appears to be well-positioned to take advantage of this mining boom as it is now becoming the preferred hotspot for crypto mining firms.
Igor Runets, found and CEO of Russian mining firm Bitriver revealed that Russia is now the preferred location for a number of American and European investors who moved their operations from China, Latin American, and Africa, according to Bitcoin.com. The reason for their relocation is that electricity is getting more expensive in those regions.
Since crypto mining is a power-intensive enterprise, electricity is the top expense item for miners. It is understandable for companies to maximize their profits by trying to manage their power bill, which might involve relocating the operations to areas with lower electricity rates.
With the sky-high prices of cryptos such as Bitcoin and Ether, crypto mining firms are busy building up their mining capacity. Runets said that Bitriver plans to expand its mining capacity to reach 1 gigawatt (GW) “in the next 18 months.”
Bitriver is currently building two mining farms in Krasnoyarsk with a total capacity of 80 megawatts. The firm will also put up a 300 MW mining facility in Buryatia located in the Siberian region.
Existing Russian mining companies have also received several applications for crypto mining hosting from foreign firms. For instance, Bitcluster has been receiving a significant volume of wholesale Chinese customer orders, according to the firm’s co-founder Sergey Arestov.
Arestov predicts that demand will further increase in the fall of 2021 as those in the mining industry are still very bullish on BTC’s price. In fact, Bitcluster recently received a large batch of orders and is now planning to expand its capacity by another 60 MW this year.
Russia’s Arctic region, where the temperature could drop as low as -40 degrees Celsius, is deemed perfect for cryptocurrency mining, Rbth.com reported. With such low temperatures, mining operations could save on electricity as cooling systems are no longer needed.
Bitcluster set up a mining farm in late 2020 next to an abandoned nickel mine in Norilsk. The company plans to raise the site mining capacity to 31MW this year up from its current 11.2 MW.
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