Russian crypto mining firm scrambles to meet foreign demand

Global cryptocurrency mining operators are increasingly moving their equipment to Russia and the Commonwealth of Independent States as they chase lower energy prices.

Igor Runets, founder and CEO of Russian crypto mining firm BitRiver, told local news agency Kommersant Thursday that the company is actively building up its power capacity to meet increasing demand from American and European investors.

According to the executive, BitRiver has run out of spare capacity at its data centers, having fully reserved all of its power for the next 18 months. During this period, the company expects to co-locate mining equipment of total mining power estimated at 1 GWh.

BitRiver, which operates the largest colocation services for Bitcoin (BTC) mining in Russia and the CIS region, is now building two new data centers in Russia, including an 80 MWh facility in Krasnoyarsk and a 300 MWh center in the Republic of Buryatia. The company expects to deploy 100 MWh by fall 2021, meeting only half of expected demand. 

The CEO noted that the growing demand is mainly coming from the United States and Europe, with investors partly moving their operations from China, Africa and Latin America, seeking lower energy prices. But the main reason for the increasing demand is the ongoing crypto rally with prices hitting new records, Runets stated. BitRiver has been already aggressively tapping the demand, setting up a massive batch of Bitcoin miners in December 2020.

Nikita Vassev, founder of CIS mining market-focused forum TerraCrypto, said that many miners are actively moving their operations from China and the U.S. to CIS countries. The exec suggested that the growing demand is coming from investment strategies intending to distribute power among different continents. Vassev said that mining operations in the U.S. and Canada are more expensive due to logistics and energy costs.

Amid a parabolic spike in mining-generated rewards, crypto mining has become more popular than ever, which has caused a significant surge in crypto's energy consumption. As previously reported, Bitcoin energy consumption has been at its highest historical levels since late 2020, with the estimated annual consumption level staying above 75 TWh for a record period of time.