As regulatory pressures, tax burdens, and energy costs rise in countries like the U.S. and Kazakhstan, experts predict a significant migration of crypto miners to Russia. According to Russian analysts, the country could potentially capture up to 18% of the global Bitcoin hashrate under such circumstances.
Russia’s appeal to crypto miners grows
Crypto mining industry experts from Intelion Data Systems, a leading Russian mining hardware importer and distributor, suggest Russia’s share of the Bitcoin hashrate could grow to 18%. As of January 2022, Russia made up nearly 4.7% of the global hashrate, ranking fifth among major mining destinations, based on Cambridge Center for Alternative Finance calculations. However, stringent policies in leading countries may trigger another major migration of miners, similar to the exodus following China’s crackdown in 2021.
Intelion’s team projects that stricter restrictions on low-cost energy access, increasing electricity rates, and higher taxes could push up to 6% of mining capacities from the United States, Canada, and China to relocate to Russia. Additionally, around half of Kazakhstan’s miners may also move their operations to Russia, potentially boosting Russia’s share of the global Bitcoin hashrate to 18%.
Russia’s crypto mining market potential
Timofey Semyonov, CEO of Intelion Data Systems, contends that Russia is well-positioned to reshape the global crypto-mining market hierarchy. He cites the country’s low electricity costs, free capacity reserves, and well-developed energy infrastructure in many regions as competitive advantages. Semyonov also points to Russian companies’ expansion efforts and government support for the industry.
To foster a favorable investment climate, Intelion’s experts stress the need for transparent regulations to legalize mining as a business activity in Russia. They foresee the crisis in the U.S. and European banking sectors just beginning, spurring demand for Bitcoin as a hedging tool and increased interest in crypto among traditional financial institutions, resulting in higher global mining volumes.
