Rising Energy Cost: Bitcoin Mining is unpractical in Europe now

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Bitcoin miners moved to northern Sweden and Norway to save money on energy. Bitcoin mining may no longer be profitable, though, considering that the cost of electricity jumped there as well this winter. Miners are shutting down for the winter, according to a CoinDesk report, due to the increase in energy prices.

Bitcoin Mining in Europe Is Becoming Infeasible due to higher energy costs (Image by sentavio on Freepik)Bitcoin Mining in Europe Is Becoming Infeasible (Image by sentavio on Freepik)

It is sad that electricity prices have risen to a record level, particularly given that winter has just started. With time, the need for heating will rise, driving up the price. Not long ago, miners came to the northern parts of Europe. The cost of electricity is among the lowest in the world since there is a surplus of hydroelectric power and little demand. Some of them even made the move to the Americas.

Rising Energy Costs

According to information from the European power exchange Nordpool, the price of electricity in northern Norway in December of this year was $0.18 USD per kilowatt hour (kWh), which is about four times the price in the previous three years. Prices are more than three times higher in Sweden.

The co-founder of mining firms Maverick Group and CMG Cryptocurrency Mining Group, Denis Rusinovich, claims He claimed that towards the end of November, low temperatures and a noteworthy lack of wind had made it difficult for power to be produced in the UK, Norway, Sweden, and Germany. Plans for planned nuclear facility repair in France, Sweden, and Finland were delayed, which was made worse by the strain on the natural gas supply brought on by the situation in Ukraine.

Rusinovich went on to say that because of the price hike, miners are motivated to turn off their machinery in order to save money on electricity costs. The ability of miners to live without getting Bitcoin mining revenues depends on their reserve capital and capacity to raise more funds, according to Kjetil Pettersen, CEO of Kryptovault, a company based in Norway.

Final Reflections

A few miners are considering selling their mining machinery because of the consistently high energy costs. The time may be right to invest in troubled assets. Core Scientific is one of many large firms that have asked for Chapter 11 bankruptcy protection. Additionally, mining sites are sold at substantial discounts between 80% and 90% off.

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