As the top spot of the China’s bitcoin miner exodus, Kazakhstan has seen an inflow of crypto miners. However, this triggers a power outage in the nation. With the energy crises, will these crypto-friendly countries change their stances on bitcoin and crypto?
The Chinese government severely cracked down on bitcoin (BTC) mining and trading activities. The crackdown triggered lots of crypto miners to migrate over 87,000 mining rugs overseas. Among others, Central Asian country Kazakhstan is the top spot.
For example, BIT Mining, a Chinese miner listed in the U.S. stock market, has shipped nearly 3,000 mining machines to Kazakhstan as of July.
However, the massive inflow of bitcoin miners leads to a sudden surge in electricity demand in Kazakhstan. According to Financial Times, the energy demand has increased by 8% this year, while its previous growth in the same period has only been less than 2%. Also, data show that the demand for electricity in Kazakhstan soared in May. During the same period, the Chinese government announced a national ban on crypto mining activities.
As miners from China’s Sichuan, Yunnan, Qinghai and other places enter, Kazakhstan’s power grid has been overloaded. The Kazakhstan Electricity Grid Operating Company will begin rationing power to crypto miners with a license. If there are grid failures, the company will first cut off the electricity to these miners.
China’s Bitcoin Miner Exodus: Kazakhstan, Texas, Russia?
In response to the power shortage in Kazakhstan, starting from 2022, the government will impose additional taxes on crypto miners. It plans to charge miners an additional tax of about US$0.0023 per kilowatt-hour (kWh).
Amid Kazakhstan’s energy crisis, local mining firm Xive has shut down more than 2,500 mining rugs.
After China’s crypto crackdown in May, Kazakhstan has become the world’s second largest spot of bitcoin mining. The country’s government estimates that the crypto industry will generate $1.1 billion in revenue in the next five years.
Besides Kazakhstan, Iran also announced a four-month ban on crypto mining this May.
On the other hand, Texas has become attractive to miners due to low electricity prices and crypto-friendly regulations. However, the market expects the inflow of crypto miners may once again make local power supply tight.
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