Demand for Cryptocurrency Miners Rises in Russia Amid Low Prices of Hardware – Demand for powerful computing devices designed to mint bitcoin has surged in Russia during the fourth quarter of the year, spurred by their low prices amid declining crypto markets, the Russian business daily Kommersant reported. The country’s cheap electricity rates and expectations for a higher supply of second-hand miners have played a role as well.
A positive trend has been seen in the market for application-specific integrated circuit (ASIC) miners, which are used to get bitcoin, even though the demand for graphics processing units (GPUs), or video cards used to verify transactions for other cryptocurrencies, has been going down recently, experts in the field told the newspaper.
People Also Read: Uzbekistan Approves Rules for Issuance and Circulation of Crypto Assets
Chilkoot, a store that sells mining tools, made more money in the first two months of Q4 than it did in the whole third quarter. The total for the first nine months of 2022 was 65% more than the same time last year. The daily also said that Bitriver, one of Russia’s largest mining companies, said that the need for miners grew 1.5 times in the first 10 months of this year.
“We work with legal entities and they began to buy 30% more equipment per transaction than at the beginning of the year,” noted Artem Eremin, Chilkoot’s development manager. He added that the prices of GPUs started falling in the second half of September and are still declining, citing Ethereum’s transition from proof-of-work to proof-of-stake mining as a major reason.
Before The Merge, miners bought a lot of video cards, but now gamers are the ones who want them the most, said Roman Kaufman, co-founder of Berezka DAO and Weezi. The crypto entrepreneur confirmed that ASICs are now becoming “hugely popular” in the Russian Federation.
Industrial mining enterprises in Russia can take advantage of the current market conditions, said Bitriver’s Financial Analyst Vladislav Antonov, who also pointed out that the increase in demand is due to decrease in wholesale prices. Between August and October, the price of mining hardware dropped by almost 20%, he said. Nikita Vassev, the founder of Terracrypto, says that the relatively low cost of electricity in Russia compared to many other parts of the world is another thing that is driving demand for crypto miners.
Despite the low valuations in the crypto market, with bitcoin (BTC) hovering in the range of $16,000 – $17,000, Russian mining firms still have some margin of safety, noted 51ASIC co-founder Mikhail Brezhnev. Using the most up-to-date coin minting machines and paying $0.07 per 1 kWh to mine, it costs about $11,000 to make 1 bitcoin.
People Also Read: Manitoba Halts New Crypto Mining Projects Due to Expected High Energy Demand
Due to the expected influx of used mining equipment, things could get better for crypto mining businesses in Russia. As Brezhnev explained, many mining companies, mainly foreign-based and financed by borrowed capital or clients, have failed to optimize their activities and may go out of business amid the current bear market. He believes their mining machines will most likely be bought in bulk by others who want to enter the industry.
The comments of the experts that Kommersant talked to came after earlier reports showed that Russia’s mining industry has been making more money and using more electricity over the past few years. But this year’s crypto winter and sanctions put in place because Moscow invaded Ukraine hurt crypto miners in Russia, and some foreign investors have already left the country.
