Paraguay Bitcoin Miners Raise Concerns as Electricity Price Hike Looms, Threatening to Shut Down 70% of Legal Miners

In a July 22 statement, Bitcoin miner HIVE Digital said it plans to construct a 100-megawatt digital asset mining operation in Paraguay.

Bitcoin miner HIVE Digital plans to construct a 100-megawatt digital asset mining operation in Paraguay, according to a July 22 statement.

The move comes as the South American country plans to increase electricity prices, a move that local Bitcoin miners say could severely impact the industry.

HIVE’s Paraguay expansion

HIVE said its planned expansion in Paraguay will add 6.5 exahash per second (EH/s) to its Bitcoin mining operations, bringing its global EH/s to 12.1 EH/s.

The firm also said it acquired 500 additional S21 Pro Antminers as part of the expansion. Once fully installed, the miners will contribute approximately 117 PH/s, pushing HIVE’s total operational hashrate to 5.6 EH/s.

The Bitcoin miner noted that these expansion plans followed meetings with Paraguayan President Santiago Peña, adding that stability in government fiscal policies—such as energy pricing and taxation—will be crucial for future expansion in the country.

According to the miner, the project is expected to generate over $100 million in stable US dollar revenue for the government’s utility company over the next three years.

HIVE also said it will offer its expertise in grid balancing and demand response to support industrial development, which will help monetize surplus or underutilized power assets in Paraguay.

Impending electricity price hike

Paraguay Bitcoin miners are raising concerns about the upcoming increase in electricity fees, which they say could force up to 70% of the country’s legal crypto miners—who are significant customers of the government—to shut down.

Jimmy Kim, the spokesperson for the Chamber of Digital Asset Mining (Capamad), expressed disappointment in Administración Nacional de Electricidad’s (ANDE)—Paraguay’s national electricity commission—decision to raise miners’ costs in a statement shared with CryptoSlate.

“ANDE’s egregious price hikes will make legal cryptocurrency mining unsustainable in Paraguay at great loss to the economy,” Kim said, adding:

“Up to 70% of legitimate operators could go out of business from August, causing thousands of direct and indirect job losses and threatening over $1.5 billion of planned technology and infrastructure investments.”

Kim said Capamad recognizes the need to combat illegal crypto mining and pledged to support efforts against such activities, adding that over 50 companies operate legally and contribute significantly to Paraguay’s economy.

According to him, legal mining companies have already invested over $700 million in Paraguay, marking the largest amount of foreign direct investment the country has ever received.

On July 19, ANDE announced efforts to implement a law protecting the local electrical system, citing crypto-mining operations as the cause of disruptions in its electricity supply.

The authorities introduced severe penalties, including up to 10 years of imprisonment and the seizure and confiscation of assets used for these activities, to deter the theft of electrical energy.

Mentioned in this article

Oluwapelumi Adejumo

Oluwapelumi values Bitcoin's potential. He imparts insights on a range of topics like DeFi, hacks, mining and culture, underlining transformative power.

Assad Jafri

AJ, a passionate journalist since Yemen's 2011 Arab Spring, has honed his skills worldwide for over a decade. Specializing in financial journalism, he now focuses on crypto reporting.

Whales’ Rolling Window: Assassins, Rate Cuts and Portfolio Allocation

Latest Bitcoin Stories

Metaplanet’s buying spree and Mt. Gox test transactions follow Bitcoin’s brief $68K climb

Bitcoin price has shown a varied performance amid the several maket developments during the past day.

July crypto inflows surpass $3 billion milestone, driven by Bitcoin ETF demand

Bitcoin and Ethereum ETFs lead $1.35 billion crypto investment boom.

How Biden’s exit opens path for a crypto-friendly Democratic platform

Crypto community members believe the political party has a strong opportunity to win back crypto votes in the coming election.

Jefferies believes Trump’s ‘overt’ support for Bitcoin will benefit crypto stocks, gold miners

Jefferies identified several crypto-related equities that could significantly benefit from these policies, including Coinbase and MicroStrategy.

Latest Alpha Market Report

An intro to Bitcoin mining fundamentals

CryptoSlate's latest market report dives deep into key quantitative metrics that show the operational and economic conditions of Bitcoin mining.

Latest Press Releases

Swisstronik Launches Incentivized Testnet 2.0 for Crypto Enthusiasts and Developers

Zircuit Raises Mainnet Funding Round With Participation From Binance Labs, Mirana Ventures, And Others

Etherfuse Raises $3M to Bring Emerging Market Debt On-chain

The above is the detailed content of Paraguay Bitcoin Miners Raise Concerns as Electricity Price Hike Looms, Threatening to Shut Down 70% of Legal Miners. For more information, please follow other related articles on the PHP Chinese website!