According to Odaily, the Bitcoin mining industry in Paraguay is facing a substantial risk of downsizing. Industry insiders have indicated that due to better conditions in other countries, the recent increase in Bitcoin mining costs in Paraguay is causing mining companies to reconsider their local strategies. For some companies that have already started looking for alternative regions in countries like Brazil and Argentina, a 14% increase in electricity costs may be too high.
One such project is a joint venture between Argentine and Brazilian companies, which is now shifting to the Zapala region in Argentina to take advantage of local energy incentive measures. The joint venture between Zapala Mining and Patagonia 360 will utilize unconventional energy extraction methods from one of Argentina's largest oil fields, Vaca Muerta, to explore the possibility of Bitcoin mining. The project aims to reach a capacity of 200 terawatts by 2026, starting from an 8 terawatt target in October.
This is not the only project seeking to relocate to other countries following the recent cost increase. Fernando Arriola, the chairman of the Paraguayan Fintech Chamber, revealed that several companies have already signed documents to start operations in Argentina.
Previously, the Paraguayan National Electricity Administration (ANDE) raised the electricity rates for cryptocurrency mining operators by 14%, affecting the profitability of such companies. Due to the lack of clarity in this field, a company planning to invest more than $400 million in Paraguay has already withdrawn.