Crypto miners in Russia are showing resilience in the face of the current challenges in crypto mining, with a surge in local demand for mining hardware reported in Q4 2022.
According to local news agency Kommersant, some distributors of crypto mining equipment in Russia have experienced a sharp increase in demand for ASIC (application-specific integrated circuit) chips designed for mining.
One local dealer, Chilkoot, reported that its sales of ASIC devices in November and October surpassed the total sales it made in Q3. The distributor has sold 65% more hardware in the past nine months compared to 2021.
Artem Eremin, development manager at Chilkoot, mentioned, “We are working with legal entities, and we see that they began to buy 30% more equipment in one transaction than at the beginning of the year.”
BitRiver, the largest crypto mining data center in Russia, also noted a significant rise in demand, with reported growth of 150% over the last 10 months.
This uptick in demand for mining hardware in Russia comes at a challenging time for the mining industry globally, evidenced by Bitcoin mining revenue hitting two-year lows in late November. Some mining companies, such as Argo Blockchain and Core Scientific, have raised concerns about their ability to sustain operations amid substantial losses due to the current bear market.
Russian miners may be accumulating crypto ASIC devices due to reduced prices of mining equipment and cost-effective energy sources. Mikhail Brezhnev, co-founder of 51ASIC, stated that mining Bitcoin in Russia can still be profitable despite a significant drop in BTC price this year. He highlighted that with electricity costs at $0.07 per kilowatt-hour and the latest mining equipment, mining 1 BTC can yield around $11,000.
As per reports, the Russian industrial crypto mining market is capitalizing on the current market conditions. Vladislav Antonov, a financial analyst at BitRiver, pointed out that the demand for ASIC equipment in the wholesale sector has surged due to declining purchase prices nearing production costs, presenting an attractive investment opportunity.
Antonov suggested that entering the mining sector during a bear market could potentially result in a “significant profit of tens of percent” over a three-year period.
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