The recent crackdown on Bitcoin mining within China is likely to lead to an exodus of miners and equipment to other countries due to the imminent threat of a full ban. Chinese cryptocurrency exchange Huobi has also suspended its Bitcoin mining services, hosting services on its mining cloud platform, and the sale of mining equipment in mainland China. The company will be using this time to focus on overseas expansion, a strategy also adopted by Chinese miners and investors. This exodus begs the question of how miners around the world can capitalize on this expected firesale of scarce mining equipment.

Does this mean I can purchase this equipment for cheap in the U.S.?

Many Chinese miners are pursuing alternative routes to continue investing in Bitcoin, including the shifting of their operations to different locations. While many have been attempting to land hosting prices below $0.045/kWh, rates in the U.S. are much higher, with Wattum’s rates being among the lowest at an average of $0.05/kWh. Miners are unlikely to liquidate their equipment just yet, so high asking prices, import duties at a hefty 27% for the U.S., and shipping fees leave the purchasing price for this second-hand equipment at less than ideal rates.

The U.S. mining scene has been ramping up, with a power plant-turned-mining farm approaching completion in upstate New York, boasting a whopping 85 MW of power. However, nearly all mining space in the U.S. is pre-reserved, leaving little to no room for domestic hosting to handle an influx of equipment.

Accessing Trusted Hosting and Management

Wattum's U.S.-based mining farm design and construction division charges up to $150,000 per megawatt (MW) for building a new mining facility. This price does not include land ownership, which increases expenses and limits flexibility and autonomy. Wattum plans to invest in a 50 MW hosting facility in Ohio, with expansion plans of up to 500 MW. Building costs and land ownership of this new facility will sit at $140,000/MW, with colocation services available to customers for as low as $0.039, further establishing Wattum’s commitment to customers in providing quality service at globally competitive rates.

As Bitcoin mining is a price-sensitive industry, Wattum has developed alternative hosting options in other countries to maximize margins for our customers in Asia, including a particularly attractive option in Kazakhstan. Kazakhstan’s government has embraced domestic Bitcoin mining, recently unveiling plans for a cryptocurrency and blockchain technology roadmap to stimulate these industries. Providing some of the world's lowest energy prices, Kazakhstan also offers savings through affordable labour, management, and repair costs. Building a data center in Kazakhstan can cost as little as $125,000 per MW including land ownership. Contrasted with the cost of building colocation centers in the U.S., Kazakhstan is emerging as an ideal destination for Bitcoin mining.

A Budding Opportunity for the Eager Investor

As used Bitcoin mining rigs become available from Chinese miners, Kazakhstan may demonstrate what makes it so ideal. With readily available land, a welcoming government, and a shared border with China, Kazakhstan presents a highly attractive option for both Chinese investors looking to move their equipment, and international investors looking to acquire used mining rigs.

Recognizing this budding opportunity, Wattum has already taken proactive measures by developing strong ties throughout the country and with the Kazakhstani government. This has aided our planned joint venture with the founders of Enegix. Wattum also has plans to build a 15MW farm in Kazakhstan, which will offer affordable and secure hosting for our customers in a prime mining location.

Other companies are also moving to take part in this rapidly developing mining hub, including BIT Mining Limited which recently invested $9.33 million in the development of a 100MW mining data center in partnership with a local Kazakhstan mining company.

If you are interested in investing in colocation infrastructure in Kazakhstan, backed by a globally-recognized Bitcoin mining farm management company, contact Wattum to learn more.