Russian crypto mining firm scrambles to meet foreign demand

Global cryptocurrency miners are increasingly moving their equipment to Russia and the CIS while chasing down low energy prices.

Igor Rontes, founder and CEO of Russian mining company BitRiver, told local news agency Kommersant on Thursday that the company is actively building its energy capacity to meet the growing demand from American and European investors.

According to the executive, BitRiver ran out of excess capacity in its data centers, after it was fully kept at full capacity for the next 18 months. During this period, the company expects to share its mining equipment with a total mining capacity of 1 GWh.

BitRiver, which operates the largest Bitcoin Mining (BTC) shared hosting services in Russia and the CIS region, is building two new data centers in Russia, including an 80MW facility in Krasnoyarsk and a 300MWh facility in Buryatia. The company expects to deploy 100 MWh by fall 2021, to meet only half of the projected demand.

The CEO noted that the increased demand is mainly coming from the United States and Europe, as investors partially move their operations from China, Africa and Latin America, seeking lower energy prices. But the main reason for the increased demand is the continuous rise in the cryptocurrency as prices reach new highs, Runtes said. BitRiver was already aggressively exploiting demand, creating a massive pool of bitcoin miners in December 2020.

Many miners are actively moving their operations from China and the United States to the CIS countries, said Nikita Vasev, founder of the TerraCrypto Forum focusing on the CIS mining market. The CEO noted that the increased demand comes from investment strategies that aim to distribute power between different continents. Vasif said mining operations in the United States and Canada are more expensive due to logistics and energy costs.

Amid an equivalent rise in bonuses generated by mining, cryptocurrency mining is more popular than ever, causing a significant increase in the energy consumption of the cryptocurrency. As previously reported, Bitcoin energy consumption has been at its highest historical levels since late 2020, with the estimated annual consumption level remaining above 75 TWh for a record period of time.