The bitcoin mining industry in Europe, which is the second-largest region for Bitcoin mining in the world (17% of global mining activity) has seen significant growth in recent years as more investors turn to cryptocurrencies as a viable asset class. With the increasing demand for Bitcoin and other digital currencies, the need for mining operations to validate transactions and secure the blockchain has become critical. This has led to an uptick in investment activity in the mining sector, with many investors looking to capitalize on this emerging market.
The increasing institutional interest in Bitcoin and other cryptocurrencies is driving investment activity in the mining industry. With more institutions like hedge funds and family offices looking to invest in digital assets, there is a growing demand for exposure to the mining sector. According to a report by CoinShares, mining companies in Europe raised $210 million in funding in the first half of 2021 alone. This represents a 235% increase from the same period in 2020, indicating a growing appetite for investment in the sector.
One of the key trends in the European bitcoin mining industry is the increasing adoption of renewable energy sources for mining operations. The total amount of electricity consumed by the bitcoin mining industry in Europe is estimated to be around 5.5 terawatt-hours (TWh) per year. This represents about 10% of the global Bitcoin mining industry’s electricity consumption. This shift towards green energy is not only driven by environmental concerns but also by the desire for mining companies to reduce their operating costs. By using renewable energy sources like wind, solar, and hydropower, mining companies can minimize their energy costs by 20% compared to using fossil fuels.
Another growing trend in the Bitcoin mining industry is the emergence of mining pools. Mining pools are groups of individual miners who pool their computing resources to increase their chances of mining a block and earning Bitcoin rewards. This trend has led to a consolidation of the industry, with larger mining pools controlling a larger share of the overall hash rate. This has also led to increased competition among miners, driving up the difficulty level of mining and making it more challenging for individual miners to be profitable.
LDA continues to have appetite companies in the crypto ecosystem at a time where fear, uncertainty and doubt permeate through the long lasting “Crypto winter”. Our investment into bitcoin mining company Sphere 3d Corp (ANY:US) as well as other platforms such as SingularityNET, SingularityDAO, Realm, Velo Labs, Digital Entertainment Asset and XDC Network, reinforces LDA’s growing appetite to deploy its institutional-grade expertise and flexible funding solutions to seek out compelling investment opportunities across the digital asset and blockchain industry.