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Texas’s Summer is Bitcoin Mining’s Winter

Nothing but dry brush along a dirt road leading from Interstate 10 to the Cormint Data Systems Bitcoin mining facility in Fort Stockton, Texas, U.S., on Friday, April 29, 2022. 

Nothing but dry brush along a dirt road leading from Interstate 10 to the Cormint Data Systems Bitcoin mining facility in Fort Stockton, Texas, U.S., on Friday, April 29, 2022. 

Photographer: Jordan Vonderhaar/Bloomberg
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Welcome to Bloomberg Crypto, our twice-weekly look at Bitcoin, blockchain and more. If someone forwarded this to you, sign up here. In today’s edition, David Pan looks at the changing landscape in Texas’s Bitcoin mining industry:

When China banished Bitcoin miners in May 2021, Texas must have seemed like the promised land. The state offered one of the most liberal regulatory regimes for crypto mining and a competitive rate for electricity that gave such businesses a profit margin on par with the luxury industry. These conditions have persisted for the displaced miners and others that joined them in flocking to Texas — until this summer.

A heatwave has pushed the state’s grid to its brink and sent power prices soaring. Now, nearly all industrial-scale Bitcoin miners in Texas have turned off their rigs to ease the strain under a non-binding agreement they made with state grid managers in the biggest pullback since the China ban. It was a condition that miners were willing to accept, even if not required, when they signed on in the state — but it’s causing a pinch now.