The Russian market for specialized crypto mining equipment has seen high demand in recent months, with buyers attracted by low prices. Russian experts also predict an increase in the supply of used coin minting hardware as large foreign companies exit the industry.
Russian Demand For Powerful ASIC Miners Soars In Q4, Report Reveals
Demand for powerful computing devices designed to mint bitcoin has surged in Russia during the fourth quarter of the year, fueled by their low prices amid falling crypto markets, Russian business daily Kommersant reported. The country's cheap electricity rates and expectations of more supply from second-hand miners have also played a role.
The positive trend in the market for SO C (application-specific integrated circuit), used to mine bitcoin, has been observed despite a recent decline in demand for graphics processing units (GPUs), or video cards used to validate transactions for other cryptocurrencies, industry experts told the newspaper.
Mining hardware retailer Chilkoot's sales in the first two months of the fourth quarter outpaced those of the entire third quarter. And the total for the prior nine months of 2022 was 65% higher than last year's volume. The newspaper also quoted Bitriver, one of Russia's largest mining operators, as saying that in the first 10 months of this year the demand for miners grew 1.5 times.
โWe worked with legal entities and they started buying 30% more equipment per transaction than at the beginning of the year,โ said Artem Eremin, Chilkoot development manager. He added that GPU prices started falling in the second half of September and are still falling, citing Ethereum's transition from proof-of-work to proof-of-stake mining as one of the main reasons.
if before the fusion Miners used to buy video cards in large numbers, now the demand comes mainly from gamers, acknowledged Roman Kaufman, co-founder of Berezka DAO and Weezi. The crypto entrepreneur confirmed that ASICs are now gaining โgreat popularityโ in the Russian Federation.
Reduced prices of new and used equipment to benefit large mining companies in Russia
Industrial mining companies in Russia can take advantage of current market conditions, Bitriver financial analyst Vladislav Antonov said, also noting that the increased demand is due to lower wholesale prices. The cost of mining hardware dropped nearly 20% between August and October, he revealed.
Russia's relatively low electricity rates, compared to many other regions of the world, are another factor supporting demand for crypto miners, according to Terracrypto founder Nikita Vassev.
Despite the low valuations in the crypto market, with bitcoin (BTC) hovering in the $16,000-$17,000 range, Russian mining companies still have some margin of safety, 51ASIC co-founder Mikhail Brezhnev noted. When using the latest model coin minting machines to mine at just $0.07 per 1 kWh, the cost of producing 1 bitcoin is around $11,000.
The picture could improve further for crypto mining companies in Russia due to the expected influx of used mining equipment. As Brezhnev explained, many mining companies, mainly foreign-based and financed with borrowed capital or clients, have failed to streamline their activities and may go out of business amid the current bear market. He believes that his mining machines will likely be bought in bulk by others looking to enter the industry.
The comments from experts interviewed by Kommersant come after earlier reports revealed significant growth in income Y electricity consumption in the Russian mining sector over a period of several years. However, this year's crypto winter and sanctions imposed in response to Moscow's invasion of Ukraine hurt crypto miners in Russia and some foreign investors have already withdrawn from the country.
Do you think that the prices of ASIC miners in the Russian market will continue to fall? Share your expectations in the comments section below.
image credits: Shutterstock, Pixabay, Wiki Commons
Disclaimer: This article is for informational purposes only. It is not a direct offer or a solicitation of an offer to buy or sell, or a recommendation or endorsement of any product, service or company. bitcoin.com does not provide investment, tax, legal or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.
