Bitcoin mining companies are considering the United Arab Emirates as a growing cryptocurrency mining center in the Middle East. This is attributed to collaborations with prominent mining firms and the digital asset division of Abu Dhabi’s sovereign wealth fund in the earlier part of this year. Bitcoin mining specialist Jaran Mellerud provided an update on the recent advancements in the UAE’s Bitcoin mining industry on July 6.
The mining revolution started in late 2021 when Zero Two, the digital asset division of Abu Dhabi’s sovereign wealth fund, teamed up with local Bitcoin mining firm Phoenix Technology. The progress continued when Zero Two established its second Bitcoin mining collaboration earlier this year, this time partnering with Marathon Digital, a public miner based in the United States.
According to Mellerud, the operational Bitcoin mining capacity in the UAE, mainly concentrated in Abu Dhabi, currently stands at approximately 400 megawatts, representing about 4% of Bitcoin’s global hash rate. However, he anticipates that by the end of this year, the capacity will likely surpass 600 MW as the semi-governmental projects continue to grow. The UAE benefits from abundant energy resources, with the majority of its electricity being generated from natural gas.
Additionally, there is a growing shift towards nuclear and solar power in the country, including the recent opening of the largest nuclear power plant in the Arab world with a capacity of 4 gigawatts, which is set to expand further this year. Consequently, the introduction of nuclear energy will drive the demand for flexibility in the mining industry.
The area is also equipped with vast solar fields that intermittently generate substantial surplus energy. Moreover, there is significant energy wastage through the country’s desalination plants, presenting an opportunity to utilize this excess energy for mining operations.
Although mining profitability, represented by the hash price, has recently seen an increase, it still remains relatively low at $0.077 per terahash per second (TH/s) per day. Hashrate Index data indicates that during the peak of the 2021 bull market, it reached as high as $0.40 TH/s/day. Additionally, the network hash rate, as reported by the mining analytics platform, is currently near its peak levels, reaching 368 EH/s.