Key Insights
- According to a recent article by a Russian news outlet, Russia has emerged in second position for the first time in the Bitcoin mining race
- According to statistics from Bitriver, the ranking is based on the amount of electricity used in cryptocurrency mining operations.
- At press time, Russia ranks second in terms of capacity behind the United States, which has a 3–4 GW capacity.
- Other major players are Kazakhstan (700 MW), the Gulf countries (700 MW), Malaysia (300 MW), Canada (400 MW), and Malaysia (100 MW).
Russia looks to have benefited from a change in the market share of Bitcoin mining centres throughout the world. And according to reports, the Russian Federation is now the second-largest Bitcoin mining centre in the world.
According to a recent article by the Russian news outlet Kommersant, regulatory uncertainty in the US has caused Russia to move up to second position for the first time, which may soon cause the rankings to change.
Kommersant further points out that, similar to the US, Russia likewise confronts regulatory uncertainties in the cryptocurrency and mining sectors.
Russia To Overtake The USA Soon?
Experts stress that the legal framework for miners has not yet been formed in Russia as a whole. However, sanctions risks are increasing for both Russian players and their foreign rivals, according to the Kommersant magazine.
According to statistics from Bitriver, the biggest mining service in Russia which offers hosting services for mining operations, the ranking is based on the amount of electricity used in cryptocurrency mining operations.
The statistical results are based on information obtained between January and March 2023. And as of press time, the nation now ranks second in terms of capacity behind the United States, which has a 3–4 GW capacity.
Other major players in this market are Kazakhstan (700 MW), the Gulf countries (700 MW), Malaysia (300 MW), Canada (400 MW), and Malaysia (100 MW).
Igor Runets, CEO of Bitriver, claims that the US mining sector is experiencing challenges due to overleveraged mining companies, declining profitability, rising power bills, and tax issues.
However, because US miners bought the great bulk of the equipment on credit, many overly indebted businesses are either about to file for bankruptcy or have already done so.
Why Does Russia Stand A Chance?
The recent success of Russia was also linked in the Kommersant article to the United States declining market share as a result of the recent crackdown on miners.
The analysis emphasized the murky regulatory situation in the US and said that it may lead to a fresh redistribution of the Bitcoin mining business.
The lack of a legal framework for miners and the escalating possibility of sanctions, however, may make it difficult for Russian miners to hold onto their market share.
According to data from The Cambridge Center for Alternative Finance, Russia had more Bitcoin mining power in December 2021 than either Kazakhstan or the United States.
China had a staggering 65% market share the year prior and had taken the lead in terms of Bitcoin hash rate.
More US Regulations
As of writing, The Biden Administration in the US has also suggested levies that would be equal to 30% of the price of the power utilized in activities for mining digital assets for all US-based bitcoin miners.
If authorized, the tax would be implemented in three years at a rate of 10% in year one, 20% in year two, and 30% in year three, starting in 2024.
Bitcoin’s Price Action
According to CoinMarketCap, Bitcoin is currently heavy on the bearish side and has sunk by 0.2% over the last day, and by a whopping 8.6% over the last seven.
The cryptocurrency currently trades at $27,328 and is well below its $31,000 high over the previous weeks.
Bitcoin currently carries a neutral verdict on the TradingView summary pane, meaning that the cryptocurrency’s price action remains unclear at this point.
While the moving averages carry a sell verdict and foretell a possible decline in Bitcoin to $25,000, the oscillators have a neutral stance.
Overall, Bitcoin needs to cross the $28,000 zone again, for another shot at a rally to $30,000.
Disclaimer: Voice of Crypto aims to deliver accurate and up-to-date information, but it will not be responsible for any missing facts or inaccurate information. Cryptocurrencies are highly volatile financial assets, so research and make your own financial decisions.
