Paraguay loses Bitcoin miners, Brazil becomes new favorite: rising electricity costs become a turning point

Paraguay once dreamed of becoming a Bitcoin mining paradise, but now that dream is facing a serious test of reality: the cost of electricity is too high. Recently, the National Electricity Administration (ANDE) announced a 14% increase in electricity charges. This change has forced many mining companies to start looking for new market opportunities, and Brazil has become their new target.

The economic viability of Bitcoin mining is highly dependent on a cheap and stable energy supply. Paraguay initially attracted many mining companies with its abundant hydroelectric power resources. However, ANDE's rising electricity costs have greatly compromised this advantage.

Large cryptocurrency mining operator Penguin Group is one of the most significantly affected businesses. Unable to bear the pressure of rising costs, they obtained up to 400MW of energy supply in neighboring Brazil. This move, and others like it, herald a potential exodus of Bitcoin miners from Paraguay.

It is no accident that Brazil has become Paraguay's rival. Brazil also has abundant hydropower resources, but more importantly, they have shown a positive willingness to cooperate with mining companies. This could include offering fixed energy rates or offering special packages to a large number of consumers.

This shift had profound consequences for both Paraguay and Brazil. For Paraguay, this means the loss of potential sources of revenue and associated economic benefits. Bitcoin mining not only creates jobs and attracts investment, it also increases electricity demand outside of peak hours.

For Brazil, this is the perfect opportunity to take advantage of Paraguay's woes. By offering competitive electricity rates and a stable regulatory environment, Brazil is expected to attract this growing industry and the economic activity it brings.

The future of Bitcoin mining in Paraguay remains uncertain. ANDE may rethink its pricing strategy to stay in this lucrative industry. However, if Brazil continues to open its doors to mining companies, Paraguay’s miner exodus could turn into a massive migration wave.