Russia’s dedicated crypto equipment market has seen high demand over the past few months, with buyers attracted by the low price tags. Russian experts also predict that the supply of used mints will increase as large foreign companies leave the industry.
Demand for Russia’s powerful ASIC miners rises in Q4, reports report
Russia’s Kommersant business newspaper reports that in the fourth quarter of the year, the demand for powerful computing devices intended for the production of bitcoins increased in Russia against the background of the decline of cryptocurrency markets. Expectations for the country’s cheap electricity tariffs and a higher supply of second-hand miners also played a role.
A positive trend in the market for ASIC (application specific integrated circuit) miners, which are used to mine Bitcoin, has been observed despite the recent decline in demand for graphics processing units (GPUs) or video cards used to verify transactions for other cryptocurrencies. industry experts told the newspaper.
In the first two months of the 4th quarter, mining equipment retailer Chilkoot’s sales exceeded those of the entire third quarter. And the total for the first nine months of 2022 was 65% higher than last year’s volume. The newspaper also cited Bitriver, one of Russia’s largest mining operators, which stated that the demand for miners increased 1.5 times in the first 10 months of this year.
“We work with legal entities, and they began to buy 30% more equipment per transaction than at the beginning of the year,” said Artem Eremin, Chilkoot’s 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 the main reason.
Roman Kaufman, co-founder of Berezka DAO and Weezi, admitted that before The Merge video cards were purchased in large quantities by miners, now the demand comes mainly from gamers. The cryptocurrency entrepreneur confirmed that ASIC is now gaining “huge popularity” in the Russian Federation.
Prices of New and Used Equipment for Large Mining Companies in Russia Have Fallen
Vladislav Antonov, a financial analyst at Bitriver, said that industrial mining enterprises in Russia could benefit from the current market conditions, noting that the increase in demand is due to the decrease in wholesale prices. Between August and October, the value of mining equipment decreased by about 20%.
According to Terracrypto founder Nikita Vassev, Russia’s relatively low electricity rates compared to many other regions of the world are another factor supporting demand for cryptocurrency miners.
51ASIC co-founder Mikhail Brezhnev noted that despite the low prices in the cryptocurrency market, with bitcoin (BTC) fluctuating between $16,000 and $17,000, Russian mining companies still have some margin of safety. When using the latest models of coin minting machines to mine at a cost of only $0.07 per kWh, the production cost of 1 bitcoin is approximately $11,000.
Due to the expected influx of used mining equipment, the picture for cryptocurrency industry enterprises in Russia may improve. As Brezhnev explained, many mining companies, mainly located abroad and financed by debt capital or customers, have not been able to optimize their operations and may cease to operate amid the current bear market. He believes their mining machines will likely be bought in bulk by others looking to enter the industry.
The comments of experts interviewed by Kommersant follow previous reports revealing a significant increase in revenue and electricity consumption in Russia’s mining sector over several years. However, this year’s crypto winter and sanctions imposed in response to Moscow’s invasion of Ukraine have hurt cryptocurrencies in Russia, and some foreign investors have already pulled out of the country.
Do you think the prices of ASIC miners in the Russian market will continue to fall? Share your expectations in the comment section below.
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