US Miners Migrate Amid Bitcoin Halving: Exodus to Africa and South America

With the Bitcoin halving event approaching in April, miners in the United States are relocating or selling older S19 series mining rigs to regions with cheaper electricity, such as Africa and South America. These older models may not be cost-effective to operate in the U.S., where energy costs are relatively high, but can still generate decent profits in areas like Ethiopia, where electricity rates are around 3 cents per kWh.

Are Miners Fleeing the U.S. in Anticipation of Bitcoin Halving?

As the Bitcoin halving event in April draws near, U.S. miners are grappling with the impending 50% reduction in mining rewards, from 6.25 BTC to 3.125 BTC per block. To stay afloat, they're exploring cost-cutting measures and relocating operations to regions with cheaper electricity.

Exodus to Africa and South America

According to Bloomberg, Luxor Technology, a major crypto-mining provider, is relocating or selling around 600,000 S19 series mining rigs, primarily to countries in Africa and South America. These older models, while still operational, may not be profitable in the U.S., where energy costs are relatively high.

Why Africa and South America?

The S19 series can be cost-prohibitive to operate in the U.S., but in certain African regions, they can still generate decent profits and extend their lifespan. Countries like Paraguay, Uruguay, Tanzania, and Ethiopia offer significantly lower electricity rates than the U.S.

Ethiopia: A Rising Crypto-Mining Hub

Ethiopia, in particular, is rapidly becoming a crypto-mining hotspot. Its electricity rates, at around 3 cents per kWh, are a fraction of those in the U.S. This has attracted miners seeking to capitalize on the country's cheap power.

Chinese Miners Eye Ethiopia

Bloomberg also reports that Chinese crypto mining companies are increasing their investments in Ethiopia, lured by its affordable energy and the Chinese government's crackdown on cryptocurrency activities.

U.S. Miners Upgrade Equipment

Meanwhile, U.S. miners are ditching their older hardware in favor of more energy-efficient machines that can withstand the post-halving environment. Many of these used rigs are being purchased by buyers in countries with lower electricity costs.

Impact on U.S. Mining Industry

The exodus of miners from the U.S. could have implications for the country's crypto-mining industry. It remains to be seen whether U.S. miners can adapt to the post-halving landscape or if the industry will shift to more cost-effective regions.