While miners are withdrawing from China, the industry in Argentina is currently experiencing a real boom. In addition to the weak national currency, one reason for this is the state-subsidized electricity price.
At the moment the mining scene is pretty much on the move. After the Chinese government announced that it wanted to tighten the measures, the miners there are withdrawing and are becoming more active in other countries. Argentina is an example of this. The reason for this is the cheap electricity in connection with the weak local currency.
Argentine politics has also done its bit to increase the popularity of cryptocurrencies among the population. Foreign exchange controls prohibited locals from buying more than $ 200. The government is desperately looking for measures to stop the three-year recession. However, the ongoing corona pandemic has made the situation anything but easy.
This situation plays into the cards for miners. In addition, there is the special feature of the state subsidy for household electricity that exists in Argentina. For the miners, this means that they can bring the mined bitcoins onto the market at the regular price, but benefit from the subsidies for the electricity. This makes the revenue soar even more.
Bitfarms puts a plant into operation in Argentina
So it is obvious that the mining companies sense their chance for big profits. Last month, Bitfarms Ltd. announced that she had secured a deal to directly tap a local power plant. Bitfarms can use it to obtain up to 210 megawatts of natural gas-powered electricity and would thus operate the largest Bitcoin mining facility in South America. 55,000 computers of the latest generation are to run on the mining farm and generate 11,774 BTC per year. Bitfarms specifies the current electricity rate of the mining center as a negligible $ 0.022 per kilowatt hour. This is just over a third of the price paid by off-grid industrial customers in the United States.
We looked for places that had their power generation systems built over. Economic activity in Argentina is declining and electricity is not being fully used. So it was a win-win situation.
Bloomberg quotes Bitfarms President Geoffrey Morphy from an interview.
In addition to the weak national currency and the subsidized price for the electricity, another favorable cost factor is the fact that the plant does not need expensive immersion cooling due to the year-round favorable climate in Argentina to keep the miners cool and to operate optimally.