Reasons Finland May Emerge as Europe’s Upcoming Leader in Crypto Mining

Finland is rapidly becoming an appealing destination for cryptocurrency mining due to its relatively cool climate, which aids in cooling mining equipment, along with its plentiful renewable energy resources.

Moreover, Finland boasts a stable political and economic landscape, which can be advantageous for long-term investments such as crypto mining ventures. Nonetheless, aspects like electricity prices, regulatory frameworks, and infrastructure availability should also be evaluated and taken into account.

Miners in Finland regard the country as an appealing site because the unique circumstance of near-zero energy costs during overproduction periods has drawn the bitcoin mining sector to the Nordic area, as stated by Lennu Keinänen, co-founder of Once Mining, a crypto mining company located in Finland, in an interview with Cryptonews.com.

Finland continues to be Europe’s most underexplored Bitcoin mining frontier in Scandinavia, even though its Nordic neighbors, Norway and Sweden, have been perceived as more attractive locations over the years. Many crypto miners migrated to the region in search of relief from escalating electricity costs in 2022.

Finland Provides Near-Zero Energy Costs

In 2023, electricity prices in Finland dipped below zero due to a surge in hydropower, nuclear energy, solar, and wind. That year, the Nordic country experienced its first monthly power surplus in nearly two decades. Analysts predict that 25 TWh of renewable energy will be developed in Finland by 2030, which will further decrease prices, according to a report from European energy markets newswire Montel News.

Low energy prices are vital for crypto miners since mining cryptocurrencies demands a considerable amount of electricity. The lower the electricity costs, the greater the profit margins for miners, as it diminishes the operational expenses linked to running mining equipment. Given that energy costs can significantly influence the profitability of mining operations, miners frequently seek locations with access to inexpensive electricity to optimize their returns.

“The unique situation of near-zero energy costs during periods of overproduction has attracted the bitcoin mining industry to Finland. Bitcoin mining requires substantial amounts of electricity, and the ability to operate at lower costs significantly enhances profitability,” noted Keinänen.

Government Subsidies and Wind Energy

The Finnish government has been offering considerable subsidies for wind energy, aiming to enhance renewable energy production and lower carbon emissions, as explained by Keinänen.

While these subsidies are well-intentioned, they have resulted in a swift expansion of wind energy capacity. This, in turn, has affected energy production, leading to a notable increase in fluctuating energy output.

“Wind energy, by its nature, is variable and relies on wind conditions. Consequently, when wind conditions are favorable, there’s an overproduction of energy, resulting in situations where electricity prices can fall below zero, reaching as low as -0.3€/kWh. Conversely, during periods of low wind, underproduction can occur, causing electricity prices to surge, at times reaching up to 2€/kWh,” stated Keinänen.

Finnish Tax Administration

The Finnish Tax Administration has clarified that cryptocurrency is subject to taxation. Miners are required to pay tax on capital gains from the sale, trade, or expenditure of cryptocurrency, as well as Income Tax on any earnings derived from activities such as crypto mining.

“The mining industry is still in its early stages here but is poised to become quite significant in the coming years,” explains Keinänen.

He further elaborates that there is substantial interest in establishing mining sites, and there is a continuous activity of site scouting occurring in Finland.

“Bitcoin mining cost efficiency is primarily influenced by the price of electricity, as mining consumes significant amounts of power. Lower electricity costs enhance profitability, as the expense of operating mining hardware is reduced. Therefore, locations with inexpensive electricity are more cost-effective for Bitcoin mining. Mining is not tax-free but can be organized in a relatively tax-efficient manner,” adds Keinänen.

The post Why Finland Could be Europe’s Next Crypto Mining Giant appeared first on Cryptonews.