Cryptocurrency miners in Russia appear to be unconcerned by the ongoing crypto mining crisis, as local demand for mining hardware has increased in Q4 2022.
Some cryptocurrency mining hardware distributors in Russia have faced a significant spike in demand for application-specific integrated circuit (ASIC) chips designed for mining, local news agency Kommersant reported Dec. 1.
Local distributor Chilkoot reported that its ASIC sales in November and October exceeded all its sales in the third quarter. In the last nine months, the distributor would have sold 65% more hardware than in 2021.
“We are working with legal entities, and we see that they began to buy 30% more equipment in a single transaction than at the beginning of the year”said Chilkoot’s director of development, Artem Eremin.
BitRiver, the largest Russian data center facility focused on cryptocurrency mining, has also seen a notable increase in demand, growing 150% in the last 10 months.
The surge in demand for cryptocurrency mining hardware in Russia comes amid difficult times for the mining industry, as total Bitcoin (BTC) mining revenue hit a two-year low in late of November. Several mining companies, such as Argo Blockchain and Core Scientific, have come to wonder if they will be able to continue operating due to the huge losses caused by the current cryptocurrency bear market.
It is likely that miners in Russia have been hoarding more and more cryptocurrency ASICs due to the reduced prices of mining devices, as well as low-cost energy.
51ASIC co-founder Mikhail Brezhnev reportedly said that lBitcoin mining in Russia may remain profitable despite the huge drop in the price of BTC this year. According to the executive, the cost of mining 1 BTC with an electricity cost of USD 0.07 per 1 kilowatt-hour with the most modern equipment can generate approximately USD 11,000. At the time of writing, Bitcoin is trading at $16,975, which is down 70% over the past year, according to data from CoinGecko.
The industrial market for cryptocurrency mining in Russia has benefited from the current market situation, according to BitRiver financial analyst Vladislav Antonov. He noted that the demand for ASIC equipment in the wholesale segment increased due to falling purchase prices, which have come as close as possible to the cost of production. This is the best entry point for investment, according to the expert.
According to Antonov, an entry into mining during a bear market can potentially generate “significant profit of tens of percentage points” over a three-year period.
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