Bitcoin and the entire crypto market is bleeding due to many challenges that have hit the industry. From the Terra crash and continued rate hikes to the FTX implosion, the market has not seen a full month of positive price trend.
As investors weep over the loss of mutual funds, Bitcoin’s miners struggle to stay afloat. As a result, the BTC price has continued to fall despite rising electricity costs to keep miners running. But surprisingly, many miners in Russia will now buy mining rigs.
Why are Russian miners buying Bitcoin mining rigs?
According to the latest report from Kommersant, many miners in Russia are snapping up more Bitcoin rigs in the fourth quarter of 2022. In addition, the researchers noted that sales of ASIC rigs skyrocketed at the end of the year. This is surprising given the continuous decline in crypto assets in the market.
Upon closer inspection, it became clear that Russian miners enjoy cheaper electricity costs. Additionally, the country made more affordable electricity available to many regions, making it easier for homes and businesses in those locations to thrive. While other miners in countries with high electricity costs struggle, their Russian counterparts have it more accessible.
Another reason to collect more ASIC crypto mining rigs is the cheap deal on the equipment. As a result, ASIC prices fell in the country, prompting many miners to acquire more.
Another reason that led to this spike in mining rig purchases was the rising interest in crypto mining as a viable investment opportunity. According to Xive co-founder Didar Bekbauov, bitcoin mining became attractive due to reduced investment opportunities, sanctions and the high-tech skills of many people in the country.
The buying frenzy 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 those with tight energy supplies.
Second, Russian regulators have introduced a law legalizing mining and sales of mined assets in the country. This bill was debated in Russia’s State Duma, the lower parliament.
Financial analyst Vladislav Antony also stated that the lower price of ASIC mining rigs, which is now close to the cost of production, is good encouragement for new investors. Mining revenue in Russia has been rising lately, despite the BTC price hitting a nearly two-year low.
Bitcoin price is above $17,000 l BTCUSDT on Tradingview.com
Sales report of mining equipment vendors
One of the mining rig distributors in Russia, Chikot, saw increased sales in October and November. This differed from their Q3 records.
Data shows that Chikot’s sales in Q1-Q3 were 65% higher than 2021 sales. Through August and October 2022, the hardware price fell almost 20% and stayed flat for the following months.
As a result, Chikot even saw a 30% increase in mining rig purchases in one transaction, unlike in early 2022.
Featured image from Pixabay, chart from TradingView.com
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