More than 18% of global bitcoin hash rate takes place in Kazakhstan, next only to the US. Kazakhstan reached this position when most Chinese miners relocated here after exiting China that cracked down on cryptocurrency mining. In 2019, China accounted for 75% of the hash rate in BTC before the percentage came down to zero in August 2021.
While major Chinese bitcoin mining companies like BTC.com and Canan moved to Kazakhstan last year, industry experts say the country is likely to lose its position in hash rate. The latest data of CBECI expected in March is likely to confirm it.
The main reason for eventual hash drop of Kazakhstan is due to its unsustainable electricity subsidies. Some level of BTC mining is expected to continue in the country even after the exodus of major crypto mining companies.
It may retain 10-15% of worldwide hash rate after any such exodus. Kazakhstan authorities in January had indicated they can remove power subsidies. They expect this action to stabilize the finances of the country.
Another reason Kazakhstan is likely to lose its leadership role in BTC mining is its heavy dependence on oil and gas. Hash rate can drop in any country that relies heavily on fossil fuel power for BTC mining.
State intervention or increased fuel prices can make power expensive. Crypto mining is not sustainable and profitable when power price is high. The hash rate shares of countries like the United States, Germany and Canada are likely to increase because of affordable renewable energy available in these countries and recent high growth of hash rates.
