Chinese firms head to Ethiopia for crypto mining, lured by cheap electricity and legal mining
Chinese companies are moving to Ethiopia to do crypto mining because the electricity there is very cheap. After China said no to crypto activities in 2021, these companies looked for new places to go. Even though Ethiopia does not allow trading cryptocurrencies, it said yes to Bitcoin mining in 2022. This made Ethiopia a good place for Chinese companies to set up their mining work.
A report from Bloomberg shows that most of the deals for electricity in Ethiopia are with Chinese companies. They like Ethiopia's electricity because it's mostly made from water power (92%) and is not expensive. Ethiopia also has cooler weather than places like Texas in the USA, where it's hotter and costs more to keep the mining machines cool. But there are some problems. Some companies pretend to be something else, like factories or farms, so they can use electricity without the official OK for Bitcoin mining. This can be risky. In other countries like Iran and Kazakhstan, the government stopped mining operations suddenly. The situation in Ethiopia could change quickly, making it a risky place to invest.
The report also mentions other places in Africa using water power for good things, like helping parks and local people, not just for mining. In short,Chinese crypto mining companies are going to Ethiopia because of its cheap and good electricity. But they have to be careful because of possible changes in the country.