Here’s How Cryptocurrency Miners In Russia Are Capitalizing On The Bear Market

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The continuing cryptocurrency mining problem doesn’t seem to be bothering Russian cryptocurrency miners, since local demand for mining equipment is said to have increased in Q4 2022.

According to local news outlet Kommersant, several Russian suppliers of crypto mining hardware have experienced a sharp increase in demand for application-specific integrated circuit (ASIC) chips made specifically for mining.

Local dealer Chilkoot claimed that their ASIC sales in November and October were greater than all of its sales for the third quarter. The distributor reportedly sold 65% more hardware in the last nine months than in 2021.

Chilkoot development manager Artem Eremin said,

“We are working with legal entities, and we see that they began to buy 30% more equipment in one transaction than at the beginning of the year.”

The demand for crypto mining services has reportedly grown by 150% over the last 10 months at BitRiver, Russia’s largest data center facility.

Russia is reportedly experiencing a surge in demand for cryptocurrency mining equipment at a time when the mining sector is struggling; in late November, total Bitcoin mining revenue fell to two-year lows. Due to the significant losses brought on by the current bear market in cryptocurrencies, several mining companies, like Argo Blockchain and Core Scientific, have even questioned if they would be able to continue operations.

Russian Miners Stockpiling Cryptocurrency ASICs

Russian miners are likely stockpiling more crypto ASICs as a result of the country’s cheap energy and lower prices for mining equipment.

Despite a sharp decline in the price of bitcoin this year, 51ASIC co-founder Mikhail Brezhnev allegedly stated that mining Bitcoin in Russia can still be viable. The executive claims that mining 1 BTC with the most up-to-date equipment may produce about $11,000 at an electricity cost of $0,07 per 1 kilowatt-hour. According to data from CoinGecko, Bitcoin is currently trading at $16,975, down around 70% over the previous year.

According to Vladislav Antonov, a financial analyst for BitRiver, the current market environment has been advantageous for the Russian industrial cryptocurrency mining business. He pointed out that a decline in purchasing prices, which have gotten as near as feasible to the cost of manufacture, stimulated demand for ASIC equipment in the wholesale market. According to reports, the expert suggested that was the ideal place to start investing.

A mining entry during a bear market, in Antonov’s estimation, may be able to produce “substantial profit of tens of percent” over the course of three years.

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