Demand for platforms advertising mining hardware on shelves has been falling since the Bank of Russia called for a ban on minting digital currency in other cryptocurrency activities. While mining may eventually be legalized, miners may pay higher electricity bills.
Russian mining chip market supply exceeds demand
The Russian online marketplace is noticing that more mining hardware is now being offered than is being sought. The trend began when the Central Bank of Russia (CBR) released a consultation paper this month in which the regulator proposed a total ban on cryptocurrency operations, including mining, citing threats to financial stability and risks to investors.
A major online platform recently told business news portal RBC that the number of ads selling coin minting devices increased in January, while demand fell. The drop in video card purchases was also recorded by Marvel Distribution, one of the leading retailers of such products in Russia.
Supply of video cards increased 12% in January compared to December as demand for GPUs fell 4%, as detailed by one of the report's sources. Supply of mining equipment increased 18 percent last month, while demand fell 9 percent from levels seen in the last month of 2021. listings for ASICs rose 17 percent, while searches for specialized hardware fell 27 percent.
The shrinking demand was confirmed by a representative of another market, who noted that the CBR report has become a turning point in consumer behavior. This is despite the failure of the monetary authorities to gain support from other institutions and the fact that President Putin highlighted the competitive advantage of Russia as a mining destination.
Meanwhile, the federal government has proposed an alternative approach, betting on regulation rather than banning cryptocurrencies. In late January, Deputy Prime Minister Dmitry Chernyshenko signed a regulatory roadmap for the industry that initially did not cover cryptocurrency mining. According to a recent report in Kommersant, Chernyshenko later instructed several relevant ministries and regulators to include mining in the document.
Industry experts are skeptical that banning the withdrawal of digital currency is technically feasible. Energy-rich Russia is one of the world's major mining hotspots, and its importance has increased since China launched a crackdown on the industry last May. There are growing calls from Moscow officials to recognize mining as a commercial activity, tax it and introduce higher electricity rates for miners.
If Russia decides to legalize and regulate cryptocurrency mining, do you think the demand for hardware will rebound? Tell us in the review section below.
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