Despite economic challenges, Russia is reportedly witnessing a boom in the Bitcoin mining sector, with hardware giants Bitmain and MicroBT ready to seize this opportunity.
According to an article by Eliza Hkritsi for CoinDesk published earlier today, Russia is the leading recipient of mining machines globally.
Historically, Russia’s affordable energy and cold climate have made it a key player in Bitcoin mining. Its prominence grew when China banned the industry in 2021, pushing Russia into the top ranks globally. Interestingly, this growth coincides with international sanctions imposed on Russia following its 2022 invasion of Ukraine.
David Carlisle, VP of Policy and Regulation at Elliptic, noted that while the sanctions don’t explicitly ban mining, they pose significant risks. Companies in Russia’s mining sector can’t do business with sanctioned entities or make payments to state banks and companies.
The CoinDesk report went on to say despite potential reputational risks, the rising price of Bitcoin and the Ordinals project have created favorable conditions for mining in Russia, according to Sergey Arestov, CEO of BitCluster. Additionally, increased regulatory scrutiny and taxation elsewhere have made Russia an attractive destination for mining operations.
Low energy costs have further incentivized Russian miners to expand their operations. Currently, miners can install their machines at other companies’ facilities for $0.05-$0.055 per kWh, significantly lower than the U.S. average of $0.08 per kWh.