Bitcoin miners moved to northern Norway and Sweden to cut down the energy costs. However, as the electricity price went up there as well during this winter, Bitcoin mining might no longer be viable anymore. Due to the increase in energy tariffs, miners are powering down for the winter, according to a CoinDesk report.
It is unfortunate to see the energy price is now at record-high, not to mention it is only the start of winter. There will be more and more demand for heating, which drives the price even higher. Not too long ago, miners in Europe rushed to the northern regions. The electricity costs are among the lowest in the world due to plentiful hydroelectric power as well as little demand. Some even migrated to the Americas.
Rising Energy Costs
According to data from the European power exchange Nordpool, the cost of electricity in northern Norway in December this year has averaged $0.18 USD per kilowatt hour (kWh), which is about four times the cost in the previous three years. Prices are more than three times higher in Sweden.
According to Denis Rusinovich, co-founder of mining firms CMG Cryptocurrency Mining Group and Maverick Group. He mentioned that low temperatures and a noticeable lack of wind made electricity generation difficult in the UK, Norway, Sweden, and Germany in late November. Delays in planned nuclear plant maintenance in France, Sweden, and Finland were made worse by strain on the supply of natural gas related to the situation in Ukraine.
Rusinovich added, miners have the reason to turn off their equipment to save money on power bills as a result of the price increase. Moreover, CEO of Norway-based Kryptovault, Kjetil Pettersen said that miners’ reserve capital and capacity to raise more funds will determine whether they are able to continue without Bitcoin mining earnings.
With the ongoing high energy costs, some miners are considering selling their mining equipment. This may be a good chance to buy distressed assets. Large companies like Core Scientific have filed for Chapter 11 bankruptcy protection. In addition, mining sites are sold with a huge discount from 80% to 90% off.
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