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The strengthening of the national currency negatively affects some activities related to crypto assets. Experts spoke about the current situation and gave forecasts for the near future
Bitcoin is at a minimum against the ruble since December 2020. On May 25, the bitcoin rate fluctuates around 1.65 million rubles, while at the beginning of the year 1 BTC was worth about 3.47 million rubles. The difference in the rate is 52.45%. Over the same period, the ruble strengthened against the dollar by 23.31% (74.29 and 56.97 rubles, respectively).
In Russia, businesses and individuals engaged in mining or investing in cryptocurrency incur expenses in rubles, such as electricity payments and taxes. On the one hand, the profit from mining directly depends on the rate of the mined cryptocurrency, and on the other hand, mining equipment is imported, and its prices are fixed in US dollars, which should make its purchase cheaper for customers from the ruble zone.
What impact does the growth of the national currency have on the sphere of mining and crypto investments? Experts presented an assessment of the situation and possible developments in the near future.
The impact of the ruble exchange rate on the income of miners and investors
On the one hand, there was a decrease in profitability in rubles by about 50% compared to the beginning of February this year, said Nikita Zuborev, senior analyst at BestChange.ru. According to him, under the conditions that the complexity of bitcoin mining during this time has increased by about 130%, we can state a significant deterioration in conditions for miners in Russia.
“However, do not forget that in addition to paying for electricity, one of the largest items of consumption for miners is the updating of equipment. As a rule, such equipment is bought abroad, while the value of bitcoin in dollars (BTC / USD) has not decreased so significantly, “Zuborev added.
Now, when the bitcoin rate has fallen, and the ruble is strongly strengthening, many devices for mining are simply becoming unprofitable, warned BitCluster co-founder Sergey Arestov.
“Industrial miners think in the long term and such moments create a great opportunity to enter the industry at a discount, since the cost of equipment for mining has fallen by almost 2 times,” Arestov is sure.
The strengthening of the ruble does not affect the mining process itself, but reduces the income of the miner who lives in the ruble zone, added Vladislav Antonov, financial analyst at BitRiver.
“The miner’s income depends on the hash rate, the cost of electricity, the block reward, the transaction fee, the bitcoin rate and the complexity of mining. The complexity is recalculated automatically every 2016 new blocks by the bitcoin network itself. On average, this happens once every two weeks. And no one can influence the recalculation,” the expert explained.
Miners should, if possible, conclude delivery futures for equipment at current prices, Zuborev added. According to him, as for the payment for electricity, unfortunately, there are no obvious legal ways to reduce risks here, except for long-term investments in alternative energy sources, but this is a very specific direction.
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