In response to growing electricity supply challenges, the Russian government is evaluating measures to limit cryptocurrency mining activities across multiple regions. This initiative, discussed in a high-level meeting chaired by Deputy Prime Minister Alexander Novak on November 19, aims to prevent potential power shortages during peak demand periods, particularly in the upcoming winter season.
The proposed restrictions are expected to impact 13 regions, including Irkutsk in Siberia and several occupied Ukrainian territories such as Donetsk, Luhansk, Zaporizhzhia, and Kherson. If implemented, these measures would remain in effect until 2031, covering critical heating months when energy consumption traditionally spikes.
The Heart of Russian Crypto Mining
The Irkutsk region has emerged as a major hub for cryptocurrency mining in Russia, thanks to its abundant hydroelectric resources, low electricity costs, and naturally cold climate. These conditions are ideal for energy-intensive mining operations and data centers.
One prominent example is BitRiver, which operates a large-scale data center in the city of Bratsk. The facility leverages power from the nearby Bratsk Hydroelectric Power Station, one of Russia’s largest hydroelectric plants with an installed capacity of 4,500 megawatts.
Regulatory Background and Industry Response
Earlier this year, in August and October, President Vladimir Putin signed new laws introducing a regulatory framework for crypto mining. While these regulations provide legal recognition for the industry, they have also been met with criticism from market participants who point to lingering legal ambiguities.
Key provisions in the legislation include a ban on mining activities by foreign entities and a clause that allows the government to prohibit mining in regions where the power grid is under strain.
Global Corporate Interest in Bitcoin Grows
Beyond Russia, Bitcoin continues to attract attention from institutional and corporate players worldwide. In a notable development, U.S. President-elect Donald Trump appointed Howard Lutnick, CEO of Cantor Fitzgerald, as Secretary of Commerce. Lutnick is a long-time supporter of cryptocurrencies, particularly Bitcoin.
Under his leadership, Cantor Fitzgerald has managed Tether’s U.S. Treasury portfolio since 2021 and began overseeing its bond investments in 2023. Lutnick has consistently expressed confidence in Tether’s financial health and announced plans in mid-2024 for a new Bitcoin-backed lending business intending to provide up to $2 billion in loans.
He has also advocated for Bitcoin to be treated as a commodity—similar to gold or oil—and has been critical of U.S. regulators for falling behind in crypto policy formation. His appointment signals a potential shift toward more crypto-friendly policies at the federal level.
Microsoft Faces Proposal to Adopt Bitcoin Strategy
In another significant move, MicroStrategy Executive Chairman Michael Saylor is set to make a brief presentation to Microsoft’s board of directors, urging the tech giant to consider allocating part of its treasury to Bitcoin. This follows a shareholder proposal submitted by the National Center for Public Policy Research (NCPPR) suggesting that Microsoft evaluate such an investment.
Saylor argues that Microsoft’s heavy reliance on quarterly earnings—which account for 98.5% of its enterprise value—makes it vulnerable. He believes that diversifying into tangible assets like Bitcoin could stabilize the company’s stock and reduce overall risk.
Although Microsoft’s board has advised shareholders to vote against the proposal at the December 10 meeting, stating the company has already assessed various investment options including Bitcoin, Saylor remains persuasive. He suggests that other cash-rich corporations like Berkshire Hathaway, Apple, Google, and Meta should also consider Bitcoin to preserve shareholder value.
Ethan Peck, Deputy Director of NCPPR, noted that even if Microsoft decides against investing, the proposal forces the company to take a clear public stance on the issue.
Rumble Considers Bitcoin Treasury Move
Video-sharing platform Rumble is also flirting with the idea of adding Bitcoin to its balance sheet. CEO Chris Pavlovski recently polled users on social media platform X (formerly Twitter), asking whether the company should buy Bitcoin. Nearly 29,000 people participated, with a majority voting in favor.
The announcement spurred a 9% increase in Rumble’s stock in after-hours trading, reaching $6.20 per share. Industry figures such as Jack Mallers, CEO of Strike, and Michael Saylor offered their support and assistance.
Rumble, known for its lenient content moderation policies, boasts approximately 67 million monthly active users. As of September 30, 2024, the company held around $132 million in cash, cash equivalents, and marketable securities. Its Q3 revenue grew 39% year-over-year to $25 million.
Should Rumble proceed, it would join other firms that have recently adopted Bitcoin as a reserve asset. For instance, AI company Genius Group purchased 110 BTC worth $10 million on November 18, with plans to convert 90% of its reserves into Bitcoin. Similarly, Japan’s Metaplanet acquired an additional $11.3 million in Bitcoin on November 19, bringing its total holdings to 1,142.2 BTC.
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Coinbase to Delist Wrapped Bitcoin (WBTC)
In a separate development, U.S.-based crypto exchange Coinbase announced it will suspend trading of Wrapped Bitcoin (WBTC) starting December 19, 2024, citing the asset’s failure to meet listing standards. The exchange has already disabled market orders for WBTC, allowing only limit orders until the full suspension. User funds remain safe and withdrawable.
WBTC is an ERC-20 token on the Ethereum blockchain, backed 1:1 by Bitcoin held in custody by BitGo. However, concerns emerged in August when BitGo partnered with Hong Kong-based exchange BiT Global, giving the latter partial control over WBTC’s multi-signature wallets. This raised fears within the community about the involvement of Tron founder Justin Sun and potential misuse of collateral.
Despite these issues, WBTC remains the largest Bitcoin-backed synthetic asset with a total value locked (TVL) exceeding $13 billion. The WBTC development team expressed disappointment with Coinbase’s decision, emphasizing their commitment to compliance and transparency.
Notably, Coinbase launched its own wrapped Bitcoin token, called Coinbase Wrapped BTC (cbBTC), on September 12. cbBTC has already accumulated around $1.4 billion in TVL, positioning it as a direct competitor to WBTC.
Compass Mining Expands Self-Owned Infrastructure
Bitcoin mining firm Compass Mining is advancing its strategy to reduce reliance on third-party hosting services. The company recently secured land and power agreements in Iowa for a new proprietary mining facility named “Iowa 4.”
Construction is already underway, with the first phase of 8 megawatts (MW) expected to go live in January 2025. Eventually, the site will expand to 30 MW. Customers who purchase new hardware through Compass will have the option to deploy their machines at this company-owned site.
This expansion is part of Compass Mining’s broader effort to minimize counterparty risk and increase operational control. So far in 2024, the company has added nearly 50 MW of capacity across sites in Indiana, Iowa, Ohio, Kentucky, Nebraska, and Texas.
👉 Learn more about Bitcoin mining infrastructure
Frequently Asked Questions
What is driving Russia’s proposed crypto mining restrictions?
Russia is facing electricity supply challenges, especially during high-demand periods like winter. The government believes limiting energy-intensive mining operations in certain regions will help prevent blackouts and stabilize the grid.
Which Russian regions would be most affected?
The Irkutsk region—a major mining hub due to cheap hydropower—would be significantly impacted, along with occupied Ukrainian territories including Donetsk, Luhansk, Zaporizhzhia, and Kherson.
How are corporations responding to Bitcoin as a reserve asset?
Companies like MicroStrategy, Genius Group, and Metaplanet have already added Bitcoin to their balance sheets. Others, including Rumble and Microsoft, are under shareholder pressure to consider doing the same.
Why is Coinbase delisting Wrapped Bitcoin?
Coinbase stated that WBTC no longer meets its listing standards. This follows concerns over BitGo’s partnership with BiT Global, which introduced perceived risks regarding the management of WBTC’s Bitcoin collateral.
What are the benefits of Bitcoin mining companies owning their facilities?
Owning infrastructure reduces dependency on third-party hosting providers, lowers operational risks, and offers greater control over energy sourcing and hardware management.
Is Wrapped Bitcoin (WBTC) still safe to use?
Yes, WBTC remains fully backed 1:1 by Bitcoin held in custody. However, users should stay informed about governance changes and consider alternatives like cbBTC if they prefer a different institutional framework.