Hot and cold – Minors of Bitcoin (BTC) in Iran must prepare to switch off their machines despite themselves. They are currently experiencing the peaks in electricity consumption related to the hot summer winds, as if the crypto winter was not enough.
Bitcoin Mining: Season of Bears and Cuts
The 118 cryptocurrency mining centers in Iran could soon to be deprived of juice. An article from Bloomberg noted that the authorities will indeed cut off the electricity for these cryptocurrency mining centers, which nevertheless operate legally.
The spokesman for the Iranian electricity industry, Mostafa Rajabi Mashhadi, justified these measures by referring to a seasonal peak in electricity demand. He also issued an alert on the continuous increase in electricity shortages in the country.
Minors are therefore warned. But will Iran actually implement these provisions penalizing the sector?
As a reminder, the country had managed to attract many miners, granting more than 1,000 licenses in 2020. Such a power cut would risk to annihilate the results of these efforts to develop the Iranian crypto ecosystem.
The effectiveness of this break also raises questions, given the geopolitical issues related to cryptocurrencies for Iran.
On this subject, studies have revealed that the country has used cryptocurrency mining as a tool to circumvent or mitigate the impact of the sanctions it faces.
Cryptocurrency mining: bad timing for a break
This possible cessation of mining in Iran comes at a critical moment for Bitcoin and its cadets. Such an event risks aggravating the already difficult context for all crypto markets.
Concretely, this cut would further lower the hash rate of the network. This timing is catastrophic for the sector. Many minors from other countries could already be forced to unplug their unprofitable machines because of the bear market.
This cessation of the activities of minors in Iran is, moreover, far from negligible, taking into account the data provided by Elliptic. The latter indicate that Iran would have concentrated 4.5% of Bitcoin mining globally, in May 2021.
To end on an unfortunately bitter note, such shocks in the mining sector probably won’t spare the crypto markets. The aftershock can then in turn significantly affect the activities of miners.
Some bitcoin miners were still in good shape in May 2022. What will be the outcome of this month of June 2022 which is putting the cryptosphere to the test?
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