Bitcoin mining boom in Russia

After the total ban on cryptocurrency mining in China, which led to the country’s hashrate being wiped out, other countries are benefiting. One of them is definitely neighboring Kazakhstan, but Russia is also experiencing a cryptocurrency mining boom.

Bitcoin mining in Russia

The problem is that the former Soviet country doesn’t actually see eye to eye with cryptocurrencies, despite being well endowed with ample energy resources. 

In fact, the Russian central bank recently launched a plan to effectively ban mutual funds from investing in cryptocurrency markets. 

However, the rocky relationship between the state and cryptocurrencies in Russia seems not to discourage miners, so much so that ASIC prices have increased dramatically. 

According to data collected on the Russian classifieds site Avito.ru, searches for mining devices have increased as much as 14 times during 2021 alone, while the supply has increased 13 times.

It is, therefore, a real explosion of demand for ASICs, almost certainly due to the consequences of the Chinese ban, and the fact that among these, there has been a sharp increase in the profitability of mining due to the sudden and drastic reduction of competition. 

Demand for graphics cards (GPUs), which have become scarce on the market due to the lack of microchips, is also increasing dramatically. 

Marvel-Distribution’s business analyst, Anton Fomin, reveals that in the first ten months of 2021, GPU sales in the country actually decreased by 15.8% compared to the same period last year, but the total value of sales increased by 129.6% due to a very strong price increase. 

According to Fomin, buyers seem to be willing to purchase these devices at almost any price.

Where mining takes place in Russia

The point is precisely the increase in profitability of mining, combined with the reduction of competition: in such a scenario, it pays to buy mining devices even at very high prices. 

The Russian economic newspaper Kommersant reveals that the areas where this demand is higher are the cities of Moscow and St. Petersburg, the two largest in the country, but also in the regions of Krasnodar Krai, the Republic of Tatarstan, and Sverdlovsk Oblast, although they are not even the regions of the country with the lowest electricity rates.

It remains to be seen whether the authorities will tolerate this situation for much longer, given the hostility they have repeatedly shown towards cryptocurrencies.