Kazakhstan's share in the global Bitcoin hashrate has decreased

According to the portal kommersant.ru referring to Bitriver, according to the results of January—March, the Russian Federation for the first time took the second place in the world in terms of capacity involved in mining — 1 GW. The USA remains the leader with 3-4 GW of mining capacity. The top 10 also includes the Gulf states (700 MW), Canada (400 MW), Malaysia (300 MW), Argentina (135 MW), Iceland (120 MW), Paraguay (100-125 MW), Kazakhstan (100 MW) and Ireland (90 MW).

In previous years, Russia held the third place. In particular, according to the Cambridge Center for Alternative Finance, at the end of 2021, the Russian Federation was ahead of the United States and Kazakhstan in terms of bitcoin mining capacity. 

Earlier, in 2020, according to the same center, 65% of the total bitcoin hashrate accounted for China, in the USA and Russia this figure was 7.2% and 6.9%, respectively.

According to BitRiver experts, the positive dynamics is due to the restriction of mining activity in Kazakhstan last year, and earlier in China due to a shortage of electricity. In particular, at the end of 2022, the Parliament of Kazakhstan introduced licensing of this type of activity, and also provided for measures to protect the national energy system from unregulated mining.

The development of the American market, adds BitRiver CEO Igor Runets, is slowed down by rising electricity prices, a reduction in mining profitability and the abolition of tax benefits. "In addition, the vast majority of equipment was purchased by American miners on credit, so many over—leveraged companies are in the process of bankruptcy or have already gone bankrupt," he explains.

However, since the United States remains the leader in the total volume of hashrate, all the attention of market participants is focused on the actions of American regulators, says Roman Nekrasov, co-founder of the ENCRY Foundation.

In the USA, the status of the cryptocurrency has not yet been determined, and the issue of the negative impact of PoW mining (the most energy-consuming process used mainly in bitcoin mining) on the environment has not been resolved. In addition, there is currently a warming on the part of Asian regulators towards the crypto industry, says Mr. Nekrasov.

The growth of mining capacity in Russia is quite expected, as there are a number of areas that are the most profitable for mining cryptocurrencies in terms of electricity prices, according to EMCD Marketing Director Alice Tsukanova. In these regions (Irkutsk and Sverdlovsk regions, Krasnoyarsk Krai and others), in addition to the low cost of electricity, there is a "favorable climate for mining", which allows you not to spend additional funds on cooling equipment, Ms. Tsukanova explained.

P.S. According to the Cambridge Center for Alternative Finance, in January 2022, Kazakhstan's share in the Bitcoin hashrate was 13.22%, and Russia's 4.6%. In this connection, we have questions about these statistics.The decline in the share of Kazakhstan is undoubtedly, but the decline to 100 MW is exaggerated, and therefore, this article looks more like an advertisement for BitRiver than an objective assessment of the market condition.