Bitcoin and the entire cryptocurrency market are bleeding due to the many challenges that have befallen the industry. From the Terra crash and continued interest rate increases to the FTX implosion, the market has not enjoyed a full month of positive price trend.
While investors cry over the loss of investment funds, Bitcoin miners are struggling to stay afloat. As a result, the price of BTC continues to fall, even with rising electricity costs for miners. But surprisingly, many miners in Russia will now buy mining rigs.
Why are Russian miners buying bitcoin mining rigs?
According to a recent Kommersant report, many miners in Russia will take over more Bitcoin rigs in the fourth quarter of 2022. Additionally, researchers found that sales of ASIC rigs surged towards the end of the year. This is surprising considering the continued decline in crypto assets in the market.
Upon closer inspection, it became clear that Russian miners were enjoying lower electricity costs. In addition, the country has provided many regions with cheaper electricity, facilitating the development of households and businesses in these places. So while other miners in countries struggle with high energy costs, their Russian counterparts have more access to it.
Another reason for stocking up on more ASIC cryptocurrency mining rigs is the economical hardware offerings. As a result, ASIC prices in the country have dropped, prompting many miners to take action to acquire more.
Another reason that led to this raise in mining rig purchases was the growing interest in cryptocurrency mining as a viable investment opportunity. According to the co-founder of Xive Didar BekbauowBitcoin mining has become attractive due to lower investment opportunities, sanctions, and 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 cryptocurrency mining. However, this was allowed in regions with larger energy allocations, not those with confined energy supplies.
Secondly, Russian regulators have introduced a draft law legalizing mining and the sale of mining assets in the country. This bill was submitted to Russia’s State Duma, the lower parliament.
Financial analyst Vladislav Antony also said that the lower price of ASIC mining devices, which is currently close to production costs, is a good incentive for fresh investors. Mining revenues in Russia have recently increased, even though the BTC price is at its lowest level in almost two years.
Mining rig suppliers sales report
In October and November, one of the distributors of mining platforms in Russia, Chikot, recorded higher sales. This result differed from the records for the third quarter.
Data shows that Chikotu’s sales in Q1-Q3 were higher than 2021 sales by 65%. By August and October 2022, the price of the equipment dropped by nearly 20% and remained at the same level in the following months.
As a result, Chikot saw up to a 30% raise in mining rig purchases in a single transaction, which is different from the records seen in early 2022.
Featured image from Pixabay, chart from TradingView.com
