In recent months, the market for specialized cryptocurrency mining hardware has been booming in Russia. This is due to buyers being attracted by the low prices. Experts predict that there will be an increase in supply of used coins minting machines, as large foreign firms leave the industry.
Russian Demand For ASIC Miners Soars In Q4, Report Reveals
The demand for powerful computing devices that can mine bitcoin has risen in Russia in recent months. These were fueled by falling crypto markets and low prices during the fourth quarter, Russian business daily Kommersant reported. Low electricity prices in the country and the expectations of increased supply from secondhand miners also played a part.
The positive market trend for ASIC (Application Specific Integrated Circuit) miners was confirmed by industry experts, the newspaper was informed. Mining Hardware retailer Chilkoot’s sales in the first two quarters of the fourth quarter were higher than those for the whole of the third quarter. And the total for the nine prior months of 2022 was 65% more than the volume last year. The newspaper also quoted Bitriver, one of Russia’s largest mining operators, which stated that the demand for miners rose 1.5 times during the first 10 months.
“We worked with legal entities and they started buying 30% more equipment per transaction than at the beginning of the year,” Artem Eremin, Chilkoot development manager, noted. He also revealed that GPU prices have been falling since the second-half of last year and are still falling, citing Ethereum’s transition from proof of work to proof of stake mining as one reason.
Before, video cards were originally bought in large quantities by miners. Now the demand is mainly from gamers, according to Roman Kaufman, co-founder of Berezka DAO and Weezi, a crypto entrepreneur. “ASICs are now in great popularity” in the Russian Federation.
Reduced Prices of new and used equipment for large mining companies in Russia
Industrial companies that mine in Russia can benefit from current market conditions. Bitriver financial analyst Vladislav Antonov noted that lower wholesale prices are responsible for the higher demand. The cost of mining hardware has dropped by almost 20% in the past two years, from August to October, he revealed.
Russia’s crypto miners are also supported by low electricity rates compared to other parts of the world, as noted by Terracrypto founding founder Nikita Vassev.
Despite low valuations being common in crypto markets, with bitcoin (BTC) hovering between $16,000 and $17,000, 51ASIC cofounder Mikhail Brezhnev says that mining companies still have some safety margin. The latest coin minting machines can mine bitcoin at $0.07 per 1kWh, which makes it around $11,000 to produce one bitcoin.
The picture could get even better for crypto mining firms in Russia due to the anticipated influx of used mining equipment. Brezhnev believes that other people will be interested in buying his mining equipment in bulk, as many foreign-based mining companies have failed to streamline operations and are likely to close their doors in this bear market.
The comments from experts interviewed by Kommersant come after previous reports showed significant growth in electricity consumption and revenue. Over a number of years, the mining sector in Russia has been thriving. However, this year’s crypto winter, and the sanctions imposed as a result of Moscow’s invasion of Ukraine, have caused crypto miners to suffer. Some foreign investors have already left the country.
Do you think that ASIC miners’ prices in the Russian Market will keep going down? Please share your expectations in the comments section below.
