By Michael Scott
Russian dealers have witnessed a surging demand for ASIC chips from crypto miners enticed by the low-cost energy and reduced prices.
Russia’s cryptocurrency mining is portraying little concern for the prevailing crisis witnessed in the global crypto industry, with dealers of mining hardware acknowledging surging demand for the devices in the last quarter.
Accelerated Demand for ASIC Equipment
Kommersant news agency reported that distributors of mining hardware had witnessed a considerable spike in the application-specific integrated circuit (ASIC) chips targeting crypto mining. The December 1 publication reveals local dealers have experienced higher ASIC sales in October and November. A leading ASIC dealer, Chilkoot, was captured, lauding the units sold as exceeding third-quarter sales.
Chilkoot head of development Artem Eremin revealed their institutional clients purchase 30% more devices in each transaction. The Chilkoot spokesperson admitted a 65% growth in the distributor’s sales for nine months compared to units sold in 2021.
The country’s largest center for crypto mining data, BitRiver, observed accelerated demand to 150% since January. BitRiver’s observation of surging demand for mining equipment illustrates potential hoarding, given the tough trends in the crypto industry.
BitRiver’s report adds that Russia’s crypto mining has witnessed declining revenue to a two-year low rate. Such is evident in the latest Argo Blockchain and Core Scientific announcement expressing concern over continuing operations. The cold feet for the mining duo arise from the massive losses caused by the prevailing bearish steam in the global crypto market.
Price-Inspired Hoarding of ASICs
The higher demand for ASICs indicated likely hoarding of the mining devices as miners seize opportunity from the reduced prices. 51ASIC chief executive Mikhail Brezhnev affirmed that the huge price decline in Bitcoin (BTC) had not eroded its mining profit.
The executive emphasized that mining energy costs $0,07 per 1 kilowatt-hour for 1 BTC. Considering contemporary devices can yield $11000, present mining is still profitable even though the BTC price has declined by 70% to hover around $16,975.
Russia’s crypto mining market benefits from the prevailing trends where purchase prices for ASIC equipment have declined. Also, crypto miners know that the pricing of mining equipment has a low markup to the production cost.
BitRiver’s analyst Vladislav Antonov attributed such awareness as the source of rising demand for ASIC devices in the wholesale segment.