Navigating the Global Bitcoin Mining Landscape: Key Insights Post-Halving
For Bitcoin miners, securing a stable location with affordable electricity has become increasingly critical following Bitcoin’s fourth halving. As the mining landscape evolves, the focus remains on optimizing costs and enhancing resource efficiency. This drive has led miners to actively seek low-cost energy sources around the globe. With mining regulations also in a state of flux, understanding regional policies and energy access becomes essential for strategic decision-making.
In this article, we will explore the mining regulations and energy environments in prominent global hubs, providing valuable insights for miners navigating this complex industry.
North America: Amid a Major Policy Shift
North America has solidified its status as one of the leading regions for Bitcoin mining. Benefiting from a favorable venture capital ecosystem, companies in the U.S. have access to premium resources, which include purchasing advanced mining equipment in bulk at discounted prices. Employers have also partnered with or acquired power plants, allowing them to tap into low-cost electricity.
While the U.S. has not implemented any outright prohibitions on cryptocurrency mining, there have been attempts at leveraging taxation. The previously proposed “Digital Asset Mining Energy excise tax (DAME)” aimed to regulate energy consumption more effectively but never took effect. With an optimistic outlook for miners heading into 2025, the regulatory environment appears more stable than anticipated.
Mining regulations can vary significantly state by state, yet the overall sentiment remains favorable. Texas has emerged as a notable hub, attracting miners through tax incentives for using flared natural gas to generate electricity, thus promoting sustainable resource usage. Canada mirrors this sentiment, although some provinces have imposed restrictions due to electricity shortages. Overall, Canada leverages its abundant hydropower while implementing regulations to ensure grid stability.
On average, the U.S. industrial electricity rate sits around $0.0815/kWh in 2024, facilitating medium to large-scale mining operations concentrated in states like Texas, Kentucky, Georgia, and New York. Actual mining electricity costs in these states typically range from $0.03/kWh to $0.06/kWh, allowing miners to hedge against market fluctuation risks through compliant derivatives. Currently, the U.S. accounts for approximately 38% of the global Bitcoin mining hashrate.
In Canada, the average industrial electricity rate stands at approximately $0.099/kWh. However, areas rich in hydropower, notably Quebec, provide power to large-scale mining farms at rates between $0.05 and $0.08/kWh. Canada contributes around 7% to 8% of the global hashrate, while North America collectively accounts for roughly 45% of the global mining share.
Central Asia: Tightening Regulatory Rules Amid Cheap Electricity
Central Asia is witnessing a shift in mining policies that leans towards formalizing mining activities rather than outright banning them. This trend aims to leverage local energy resources effectively while maintaining electricity grid stability.
Between 2022 and 2023, Kazakhstan introduced a suite of licensing, taxation, and regulatory measures directed at miners. Similarly, both Uzbekistan and Kyrgyzstan have tightened licensing requirements and increased electricity costs for mining operations.
The region benefits from abundant hydropower and coal resources, making it economically favorable for small-scale mining ventures. Reports indicate that the average residential electricity price is roughly $0.06/kWh, with mining farms in energy-rich areas enjoying costs as low as $0.03 to $0.06/kWh. This dynamic creates a unique balance between energy advantages and increasing regulatory rigor, which has led some miners to consider relocating their operations.
China: Underground Mining Persists Despite General Ban
Historically, China was the epicenter for Bitcoin mining, claiming over 50% of the global hashrate. However, since the nationwide prohibition enacted in 2021, official crypto mining has faced severe restrictions.
Despite these hurdles, data suggests that underground mining continues in regions like Sichuan and Xinjiang, where electricity remains abundant. Industry sources estimate that these clandestine mining operations enjoy electricity costs below $0.05/kWh, although official statistics are unavailable. Remarkably, these underground activities are believed to account for about 20% of the global hashrate, illustrating the persistent demand for Bitcoin mining in China, despite stringent regulations.
Diverse Landscapes: Latin America, Africa, Middle East, Southeast Asia, and Europe
In Latin America, mining operations once thrived in hydro-rich countries like Paraguay and Uruguay. However, Paraguay’s 2024 decision to increase electricity tariffs for mining has forced many operations to relocate to Argentina or investigate energy opportunities near oilfields. Despite these challenges, U.S.-based firms like HIVE Digital are actively expanding their presence in Paraguay through new developments and acquisitions.
In contrast, Africa has not imposed comprehensive bans on crypto mining; however, inconsistent electricity supply generally limits operations to smaller, decentralized facilities. Ethiopia has begun to harness hydropower from the Grand Ethiopian Renaissance Dam (GERD) to boost mining activities, providing competitive electricity rates. Nonetheless, the persistent issue of substantial electricity shortages remains a significant drawback.
The Middle East offers a complicated regulatory landscape regarding mining. Iran has legalized crypto mining, allowing selected power plants to mine, albeit with restrictions on operations during peak consumption periods. Countries such as the UAE and Oman actively seek to attract mining businesses through favorable tax rates and competitive electricity prices. Still, persistent regulatory uncertainties cloud the region’s potential.
Southeast Asian nations have largely refrained from outright bans on mining but enforce strict regulations against unauthorized electricity use. Countries like Malaysia, Indonesia, and Laos regularly crack down on illegal operations, highlighting the ongoing struggle between regulation and mining activities.
Within Europe, the regulatory landscape is complex yet navigable. The European Union does not prohibit crypto mining but regulates it in accordance with climate policies. Countries with high electricity costs—like Germany, France, and the UK—pose challenges for large-scale mining activities. In contrast, Nordic nations such as Norway, Sweden, and Iceland attract miners with their access to cost-effective hydropower and geothermal energy. Collectively, Europe makes up about 5% of the global Bitcoin mining hashrate, excluding Russia.
As the Bitcoin halving cycle progresses, miners continue to rely on affordable renewable energy sources, including hydropower, wind, and solar. Optimally utilizing lower electricity rates during off-peak hours contributes not only to improved profitability but also to enhanced energy grid management by harnessing excess power.
With North America establishing its dominance in Bitcoin mining and Central Asia demonstrating steady growth, miners have more strategic opportunities than ever as regulatory clarity expands and sustainable energy options proliferate. Navigating these changing conditions will be crucial for maintaining profitability in this ever-evolving landscape.