Bitcoin miners relocated to northern Norway and Sweden in order to reduce energy costs. However, because electricity prices increased there as well this winter, Bitcoin mining may no longer be viable. According to a CoinDesk report, miners are shutting down for the winter due to an increase in energy tariffs
It is unfortunate that energy prices have reached an all-time high, especially given that winter has only just begun. Heating will become increasingly popular, driving up prices even further. Miners in Europe flocked to the northern regions not long ago. Because of abundant hydroelectric power and low demand, electricity costs are among the lowest in the world. Some even made their way to the Americas.
Rising Energy Prices
According to Nordpool data, the cost of electricity in northern Norway in December this year averaged $0.18 USD per kilowatt hour (kWh), nearly four times the cost in the previous three years. Prices in Sweden are more than three times higher.
Denis Rusinovich, co-founder of mining firms CMG Cryptocurrency Mining Group and Maverick Group, believes that. In late November, he mentioned that low temperatures and a noticeable lack of wind made electricity generation difficult in the United Kingdom, Norway, Sweden, and Germany. Delays in planned nuclear plant maintenance in France, Sweden, and Finland were exacerbated by the strain on natural gas supplies caused by the Ukraine situation.
As a result of the price increase, miners have reason to turn off their equipment, according to Rusinovich. Furthermore, Kjetil Pettersen, CEO of Norway-based Kryptovault, stated that miners' reserve capital and ability to raise additional funds will determine whether they can continue to operate without Bitcoin mining earnings.
Because of the high energy prices, some miners are considering selling their mining equipment. This could be a good time to invest in distressed assets. Core Scientific, for example, has filed for Chapter 11 bankruptcy protection. Furthermore, mining sites are sold at steep discounts ranging from 80% to 90% off.
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