Phoenix Group Boosts Bitcoin Mining Capacity in Ethiopia by 30 MW Amidst Industry Challenges Translation: Phoenix Group Boosts Bitcoin Mining Capacity in Ethiopia by 30 MW Amidst Industry Challenges

The mining firm Phoenix Group, headquartered in Abu Dhabi (UAE), has announced the launch of a 30 MW cryptocurrency mining operation in Addis Ababa, the capital of Ethiopia.

This initiative is being executed in collaboration with the state-owned Ethiopian Electric Power.

The data center, located in the Bole Lemi industrial park, is expected to contribute 1.9 EH/s to Phoenix’s existing hash rate. The company’s expansion in Africa has been described as a step towards scaling its capacity to 1 GW.

According to their website, Phoenix has approximately completed half of this objective. The company operates over 100,000 ASIC miners deployed across five countries.

In May, the company announced an increase in its operational capacity in Ethiopia by 52 MW, bringing the total capacity in the country to 132 MW.

With the new facility in Addis Ababa, Ethiopia accounts for about one-third of Phoenix’s total hash rate.

In July, Ethiopian authorities, citing a high demand for electricity from miners, announced plans to raise tariffs for businesses. Over the next four years, the price per kWh is expected to rise from approximately $0.015 to $0.075.

Amid record network difficulty and a correction in Bitcoin prices to around $100,000, miner profitability, measured by hash price, has fallen to a range of $40-42 per TH/s per day.

Experts predict that the current metric values put even the most efficient miners who use the Antminer S21 or M66S from MicroBT at the brink of profitability under average U.S. tariff rates of $0.05-0.07.

TheMinerMag has confirmed that industry participants have entered survival mode, with many, especially small enterprises, teetering on the edge of decisions: “We earn a tiny margin” and “It might be time to shut down.”

Analysts pointed out that the financial squeeze on cryptocurrency mining significantly impacts the entire supply chain. Equipment manufacturers face losses since they largely relied on Bitcoin sales to sustain demand during this cycle.

An example of such challenges is the deal between American Bitcoin and Bitmain for the purchase of 17,000 U3S21EXPH units for $333 million. The mining company provided cryptocurrency as collateral at an agreed price of $120,000 per BTC.

Under the agreement, the coins do not immediately transfer ownership to Bitmain. The portion of digital assets corresponding to the payment for the delivered batches of equipment becomes «redeemable» by American Bitcoin within 24 months of receiving the equipment.

This scheme seemed logical during a bullish market, enabling the manufacturer to receive large orders. However, if the price of digital gold does not recover, American Bitcoin will lack the incentive to redeem the collateral, risking Bitmain realizing significantly lower revenue than initially anticipated by the contract, experts highlighted.

They believe that the increase in Bitcoin sales from miners serves as an additional signal of liquidity crisis among miners. For instance, CleanSpark sold 97% of the cryptocurrency it produced in October.

MARA has become another major player in the industry to abandon the strategy of holding 100% of generated coins. In the third quarter, the largest public miner earned $9.6 million in interest income from a loan portfolio of 10,377 BTC. However, a net loss of 101 BTC in trading with Two Prime practically negated these positive results.

It is noteworthy that over the past year, the collective debt of Bitcoin miners has surged sixfold, rising from $2.1 billion to $12.7 billion, according to data from VanEck.