Due to the decline in electricity prices, Sweden and Norway have again become attractive countries for mining Bitcoin and other cryptocurrencies.
Given the humid climate of the Scandinavian countries, over the past 20 years, a large number of hydroelectric power plants have appeared in them, generating surplus electricity. This is the reason for the low cost of electricity in these countries. Their average electricity tariff this year is one third of that in Germany, Europe’s largest energy market.
Last year, Norway had the lowest electricity prices for industrial consumers among the 30 member countries of the International Energy Agency. In the first half of 2020, this country had the lowest electricity prices in the European Union. In this regard, Norway is slightly ahead of Iceland, which is also considered a profitable country for mining.
Thanks to such market dynamics, Sweden and Norway can once again become an alternative to countries that prefer cryptocurrency miners: China, Kazakhstan and Canada. The fall in the bitcoin rate after its bull rally in 2017 and the increase in electricity tariffs in Sweden and Norway have made it unprofitable for miners to mine cryptocurrencies in these countries. Therefore, the miners were forced to move to territories with more favorable conditions.
“Those who have gone through this difficult period, like us, are now quite happy. There were times when we didn’t return at all, but over the past year, the profitability of our business has almost tripled, ”said Philip Salter, COO of Genesis Mining, which operates a mining center in the Swedish city of Boudin.
Tor Reier Lilleholt, head of analytics at Wattsight AS, said the Scandinavian countries boast some of the lowest electricity rates in the world aside from fees and taxes. The advantage of these countries lies in the generation of clean energy with the help of hydroelectric power plants and wind turbines. This aspect is important for institutional investors interested in cryptocurrencies.
Salter also believes that miners based in China could move to Western countries such as Sweden and Norway. This is due to the fact that investors openly invest in bitcoin, so they are concerned about the issue of stability and environmental safety.
According to the analytical company TokenInsight, China began to lose its leadership in bitcoin mining due to the increase in the number of miners in the United States and Kazakhstan.
