Bitcoin mining companies have been tirelessly seeking a permanent location since their exodus from China. The spotlight recently landed on the United Arab Emirates (UAE), rapidly becoming the Middle Eastern hub for crypto mining. It appears that the UAE’s digital embrace, heralded by native Bitcoin mining firm Phoenix Technology’s partnership with the Abu Dhabi sovereign wealth fund, Zero Two, has sparked a sea change in the industry.
Despite initial hesitance, mining companies are changing tack, recognizing the potential of the Middle Eastern nation. Echoing the Phoenix Technology-Zero Two collaboration, the fund cemented another alliance in 2023 with Marathon Digital, a U.S. based mining firm. Presently, the UAE is home to nearly 4% of the Bitcoin global hashrate, or around 400 megawatts, as outlined by Jaran Mellerud, a Bitcoin mining specialist.
While abundant and affordable energy is a significant consideration for any mining operation, the UAE offers another compelling reason: substantial crypto-friendliness. Contrasting with China’s standoffish stance, the UAE provides a warm welcome, coupled with a surplus of energy supply. Current electricity production is mainly powered by natural gas, but the nation is gradually transitioning towards nuclear and solar power.
A testament to this shift, the UAE recently opened its first and the region’s largest nuclear power plant—bringing 4 gigawatts of additional capacity, which is set to increase this year. Hence, this infusion of nuclear energy could induce increased demand for flexibility.
In addition, the country’s geographical advantages lend themselves favorably to solar energy, providing sizable additional power from its extensive solar fields. Much of this power is currently funneled towards desalination plants, but could be directed to Bitcoin mining plants, ensuring more efficient energy consumption.
Mellerud predicts a shining future for Bitcoin miners in the UAE. Accordingly, mining companies are likely to continue courting the nation, establishing further collaborations with Zero Two and local authorities. Mellerud’s forecast postures the UAE as a powerhouse in Bitcoin mining, potentially setting the stage for neighboring countries to follow suit.
However, while the UAE’s prospects are captivating, current mining profitability remains relatively subdued. With earning rates currently settled at $0.077/TH/s/day, it significantly drifts from the 2021 bull-market peak of $0.40/TH/s/day. However, recent developments suggest an upward trajectory, rendering this trajectory something to watch closely.
Source: Cryptonews
