Bitcoin miners leave Europe, struggling to find a “new landing”

The problem of high energy costs has forced European Bitcoin miners to change their place of residence. They sought out the remote regions of northern Norway and Sweden.

Miners looking to leave Europe

Since Russia halted gas supplies to Europe under pressure from sanctions, the region’s residents have faced record-high natural gas prices. According to figures in August, each megawatt-hour (mWh) costs more than 300 USD. Meanwhile, Bitcoin has lost about 60% of its value this year and is only hovering around $19,000. These factors have resulted in Bitcoin mining being almost unprofitable across much of the continent.

However, the miners have considered another “practice” place. As in Norway and Sweden. Whose territory this country is divided into different energy markets. Energy in the north is 10 times cheaper than in the south; and vice versa, the southern regions are connected to the European market, so both energy demand and prices are higher.

Kjetil Pettersen, CEO of a company that operates large-scale Bitcoin mining centers in southern Norway called Kryptovault, shared that they are looking to migrate north. The company is gradually moving the machines to the Lofoten region, just north of the Arctic Circle.

According to the founder of cryptocurrency mining and investment company Cowa Energy, the European mining industry is suffering a “catastrophe” from the current macroeconomic situation. Accordingly, miners are faced with the choice of shutting down or moving to a place with cheaper energy. And the northern regions of Norway and Sweden, or the Americas became the promised land for this group of workers.

Daniel Jogg, CEO of Hungarian mining equipment supplier Enerhash, also said that in Germany, many Bitcoin miners have also ceased operations and are looking to gradually move to the US or Sweden.

The migration plan comes with many risks

The first risk may come from the authorities. For example, the US, this country can introduce stricter regulatory frameworks for the cryptocurrency mining industry. Electricity prices in the northern regions of Sweden are sometimes very volatile, a few days in September electricity prices increase 6 times the annual average, if wind power output is low.

On the other hand, European politicians have repeatedly urged people to cut energy consumption restrictions, or else take other measures. For example, French President Emmanuel Macron said that the country was preparing plans to set maximum energy consumption limits, in case of need.

In the face of a “limited” energy landscape, the mining industry could very well become an eye-catching and easy target, as the controversy over its necessity continues to be intense. The frozen grasslands of northern Norway and Sweden will probably be the last resort.