Kazakhstan rises to become the third-largest Bitcoin mining hub globally, as Chinese mining companies accelerate strategic relocations

Since the beginning of this year, a new wave of industry migration is unfolding in the global cryptocurrency market. According to tracking data from the Cambridge Alternative Finance Center, Kazakhstan’s Bitcoin mining hash rate climbed to the third position worldwide in April, with a market share of 8.2%, representing a sixfold increase compared to September 2019. Behind this shift lies the strategic deployment by leading Chinese mining companies. As China’s regulations on cryptocurrency mining tighten, Kazakhstan, located in Central Asia, is becoming the most attractive new hotspot for Bitcoin mining after the United States.

The Western Asia Front of Mining Giants: China’s Leading Mining Companies’ Global Expansion

Chinese leading publicly listed Bitcoin mining companies are accelerating their deployment in Kazakhstan. As a leader in the field, Bit Mining has made significant adjustments: the company officially announced its exit from the Chinese lottery business and shifted its focus to overseas Bitcoin mining operations. To support this strategic shift, Bit Mining recently signed a purchase agreement, investing approximately $6.6 million to acquire 2,500 high-performance Bitcoin miners, which will increase its hash rate by 165 PH/s after deployment.

Furthermore, Bit Mining has launched large-scale infrastructure projects in Kazakhstan. In May, the company signed a legally binding investment agreement with local partners, planning to jointly invest 60 million RMB to build a mining farm with an operational load of 100,000 kW in Kazakhstan. After completion, Bit Mining will hold an 80% stake in the farm. Public information shows that Bit Mining has deployed 3,819 Bitcoin miners (total hash rate of 172 PH/s) in Kazakhstan’s data centers, with an additional 4,033 units (hash rate of 121 PH/s) already arrived and awaiting operation.

As China’s first listed mining company, Canaan Technology has also taken proactive steps. In June, Canaan launched its self-operated mining business in Kazakhstan, with the first batch of Avalon miners already running. The company has also reached cooperation agreements with multiple Kazakh mining farms, with new models of miners (including A1166Pro, A1246, etc.) being shipped there. To enhance service experience, Canaan has established a China-Kazakhstan dedicated line. Considering the local shortage of technical maintenance personnel, Canaan announced plans to open its first after-sales service center in Kazakhstan, which will also be its first operational center outside China.

Former market competitors are also re-entering the overseas market. Bitmain’s Antminer S19 Pro miners will be hosted at Enegix’s 180,000 kW data center starting July 23. Enegix, one of Kazakhstan’s largest Bitcoin mining companies, has been expanding its operations since late 2020 and has now become an important platform for international mining companies.

Natural Endowments and Energy Advantages: Why Kazakhstan Is Becoming a New Paradise for Bitcoin Mining

Kazakhstan, located in the heart of Central Asia, covers an area of 2.7 million square kilometers, making it the largest landlocked country in the world. Its abundant resources make it an ideal location for Bitcoin mining.

Competitive Energy Costs: Kazakhstan possesses one of the world’s richest coal resources, with ample electricity supply. Data shows that the country has a surplus of 4 million kW of electricity, while the 13 large-scale Bitcoin mining farms currently in operation only consume 620,000 kW, leaving significant room for growth. In terms of electricity pricing, mining farms in Kazakhstan pay about $0.03 per kWh (roughly RMB 0.2), comparable to the flood season electricity prices in Sichuan, China, but far lower than the $0.3-0.4 per kWh in the Northwestern regions. In some areas, electricity costs are as low as RMB 0.1 per kWh, making it feasible for even lower-performance miners to operate profitably. Notably, many Kazakh mining farms are directly connected to the national grid, providing more stable power supply and higher price transparency compared to independent hosting.

Climate Advantages: The northern regions of Kazakhstan, with higher latitudes, have climates similar to Russia and Northwestern China, with low temperatures that significantly reduce cooling costs for mining. For example, in Ekibastuz, a northern city, summer temperatures rarely exceed 28°C, providing an ideal environment for Bitcoin mining operations.

Robust Infrastructure Support: The Astana International Financial Center (AIFC) in Nur-Sultan has become one of Central Asia’s most important financial hubs. It offers visa facilitation, tax incentives, legal consulting, and other one-stop services for Bitcoin mining companies registered there. Industry giants like Bitfury and Powerry have established operational centers within the center. According to data from the AIFC Investment Department, Kazakhstan has built 116 renewable energy facilities with a capacity of 1.68 GW, accounting for 3% of the country’s total power generation. Since there are no transportation costs for electricity, most green power is directly supplied to the mining industry. Experienced local contractors can complete hosting farm construction within 3-4 weeks.

Additionally, the AIFC is constructing an offshore RMB trading center in Nur-Sultan, enabling miners to finance locally without currency conversion, significantly reducing financing costs.

Policy Favoritism and Institutional Design: A New Map for the Legalization of Bitcoin Mining

On the policy level, the Kazakh government has explicitly regarded blockchain technology as a core engine of the country’s digital transformation and is committed to promoting the regulated development of Bitcoin mining within a legal framework. President Kassym-Jomart Tokayev has publicly called cryptocurrencies “absolute innovation” and has advanced related industry institutional development.

Tax Policy Framework: Given the rapid development of the Bitcoin mining industry in Kazakhstan, the president signed a new tax law in June to regulate this energy-intensive industry. The law will take effect on January 1, 2022. According to the new regulations, a surcharge of 1 Tenge (about $0.0024) per kWh will be levied on electricity consumption. Taxpayers include all legal entities and individuals engaged in Bitcoin mining, who must report quarterly and submit mining results to the Information Security Committee of the Kazakhstan Digital Development Ministry.

Institutional Innovation in Infrastructure and Services: The Kazakhstan Digital Development Ministry is working with AIFC and the Blockchain Association to formulate regulations for the cryptocurrency industry and standards for blockchain technology. The Central Bank of Kazakhstan is also planning to pilot a central bank digital currency (CBDC). Currently, the IT park established by the AIFC offers tax incentives for Bitcoin mining companies—before the new tax law takes effect, data center tenants only need to pay 1% of their annual turnover as a “usage fee,” with no other taxes.

Open Banking Pilot: On July 27, the AIFC announced the launch of a one-year pilot project for cryptocurrency banking accounts. The goal is to assess the risk and return characteristics of digital assets and accumulate experience for long-term policy formulation. According to the Kazakhstan Blockchain and Data Center Industry Association, under the AIFC framework, registered crypto exchanges will soon establish cooperation with local banks. At that time, investors will be able to open legitimate accounts at AIFC-registered banks to directly transfer funds, buy Bitcoin, and perform other operations. Miners will also be able to transfer mining income back to accounts in fiat currency, with banks acting as intermediaries, eliminating complex currency exchange processes.

Sergei Putra, government relations coordinator of the Kazakhstan Blockchain and Data Center Industry Association, pointed out that the global crypto market is large, and even if Kazakhstan only captures 1% of the market share, the inflow of investment through taxes, employment, and wages will ultimately bring significant economic benefits to the local area. For resource-based economic transformation and upgrading, the Bitcoin mining industry has become an unavoidable strategic choice for Kazakhstan.

Future Opportunities and Challenges: Industry Prospects in the Green Transition

As Kazakhstan continues to improve policies, energy, and infrastructure, the country is attracting more and more global mining enterprises and capital inflows. The strategic migration of Chinese mining companies is accelerating this trend.

However, the outlook is not without challenges. Currently, Bitcoin mining in Kazakhstan still mainly relies on fossil fuels such as coal. Considering the country’s commitment to achieving a green economy transition by 2030 and increasing the share of renewable and alternative energy to 50% of total consumption by 2050, the Bitcoin mining industry may face policy risks related to energy restructuring in the future. This requires mining companies to seize current opportunities while preparing for long-term green energy transformation. Nonetheless, Kazakhstan, leveraging its resource advantages, policy support, and increasingly advanced Bitcoin mining infrastructure, has become a key hub in the global mining reshuffle.