Russian cryptocurrency miners seem unfazed by the ongoing cryptocurrency mining crisis, as local demand for mining hardware has been on the rise in Q4 2022.
Some crypto mining hardware distributors in Russia have experienced a significant increase in demand for application-specific integrated circuit chips (ASICs) designed for mining, local news agency Kommersant reported on December 1.
Local dealer Chilkoot reported its ASIC sales in November and October exceeded its entire Q3 sales. In the last nine months, the retailer sold 65% more hardware than in 2021.
“We work with legal entities and we see that they started to buy 30% more equipment in one transaction than at the beginning of the year,” said Artem Eremin, Chilkoot development manager.
BitRiver, Russia’s largest data center focused on crypto mining, has also seen a notable increase in demand, posting a 150% increase over the past 10 months.
Russia’s reported surge in demand for cryptocurrency mining hardware comes amid tough times for the mining industry, with a total of Bitcoin
mining revenues hit two-year lows at the end of November. A number of mining firms – including Argo Blockchain and Core Scientific – have questioned whether they can even continue operations due to massive losses caused by the current crypto bear market.
Miners in Russia have probably been accumulating more and more crypto ASICs due to the low prices of mining rigs as well as low cost energy.
Mikhail Brezhnev, co-founder of 51ASIC, said that Bitcoin mining in Russia can still be profitable despite the massive drop in BTC price this year. According to the executive, the cost of mining 1 BTC at the cost of electricity of $0.07 per 1 kilowatt-hour with the most modern equipment can generate about $11,000. At the time of writing, Bitcoin is trading at $16,975, down about 70% over the past year, according to data from CoinGecko.
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Russia’s industrial crypto mining market has benefited from the current market situation, said BitRiver financial analyst Vladislav Antonov. He noted that the demand for ASIC equipment in the wholesale segment has increased due to the decrease in purchase prices, which have come as close as possible to the cost of production. This is the best entry point for investment, the expert said.
According to Antonov, an entry into mining during a bear market can generate “significant profits of tens of percent” over a three-year period.