Bitcoin mining has its sights set on a new destination: the Middle East.
Spurred by a flurry of recent partnerships and various government investments, the Middle East is betting big on the future of Bitcoin.
- Oman, who shares land borders with Saudi Arabia and the United Arab Emirates, has announced their intent to put $1.1 billion into Bitcoin mining infrastructure, which is an unprecedented move for the nation
- Oman is moving quickly, already expanding an existing pilot project Bitcoin mining facility that currently has 2,000 machines operational into an aggressive expansion that will take the facility to 15,000 machines, costing roughly $350 million in new capital investment. The facility will use leading hardware provided by Bitmain
- This past spring Marathon Digital (NASDAQ: MARA) partnered with Zero Two, the digital asset arm of the Saudi sovereign wealth fund, to collaborate on new Bitcoin mining facilities in Abu Dhabi
- The UAE as a whole has become friendly Bitcoin friendly, with the region now representing roughly 4% of the global hash rate for Bitcoin miners
- The UAE has significant energy resources, as much of their electricity is generated from natural gas which they have in abundance
- Further, the UAE is looking towards the future of how they will produce their energy, recently opening the largest nuclear power plant in the Middle East
- Solar farming and solar fields are another area of innovation the UAE is pursuing which could potentially be converted to low cost power to fuel Bitcoin miners who are building infrastructure in the region
The fine print:
- Regulations in the UAE and Middle East in general still remain murky, with much of Bitcoin mining operating in a grey area
- Large scale Bitcoin mining operations have not been proven out yet, as many are still in their infancy or still in the process of being built out
- While energy abundance is available in the Middle East, it is unclear how many North American based Bitcoin miners will want to consider moving or expanding operations to a part of the world without a clearer regulatory framework and path forward