Ethiopia Unveils $250 Million Bitcoin Mining Gamble

Ethiopian Investment Holdings announced a $250 million investment for state-of-the-art infrastructure for mining and AI training.

Hashlabs Mining CEO Kal Kassa of Ethiopia said that the government of Ethiopia is going to start mining Bitcoin through a new relationship with Data Center Service, a division of West Data Group.

Ethiopian Investment Holdings (EIH), the country’s sovereign wealth fund, announced the alliance on February 15.

The partnership calls for a $250 million investment from the sovereign wealth fund to set up “state-of-the-art infrastructure for data mining and artificial intelligence (AI) training operations in Ethiopia.”

As part of the country’s larger plan to exploit its energy and technology resources to attract international investment and promote economic prosperity, the transaction, according to Kassa, involves setting up Bitcoin mining operations employing Canaan Avalon machines.

But there has been no formal confirmation from the government. As of the time of publishing, EIH had not responded to a request for comment.

The news is released just as mining activity is peaking ahead of the halving, which is scheduled to occur in fewer than 65 days and would cut mining payouts in half. To get yourself in the right position, a lot of miners have already started expanding.

Shifting terrain of regulations
Bitcoin mining is quite energy consuming, which is one of the many controversial aspects of the venture.

The effect of these projects on the local power grid is a topic of heated controversy, particularly in a nation where many people still lack reliable access to the grid.

Regardless of these worries, the Ethiopian government is taking a cautiously hopeful approach to embrace the possible economic advantages of Bitcoin mining by moving towards regulating “cryptographic products,” which includes mining.

To protect the nation’s energy security and environmental pledges, this regulatory framework will keep the sector from expanding unchecked.

Mining corporations can now set up shop in the country according to the new rules. According to recent news sources, the country has seen a dramatic influx of Chinese miners as a result of the BRICS initiative.

Miners from China
In recent months, Ethiopia’s strategic measures and favorable conditions have attracted a significant number of Chinese miners.

This development is a part of a bigger trend in which Bitcoin mining operations in China are moving abroad in quest of less stringent regulations and lower costs.

One of the main draws for Chinese miners is Ethiopia’s cheap power, which is mainly caused by the Grand Ethiopian Renaissance Dam. Because of this, as well as the government’s willingness to welcome technical investments and create an atmosphere that is favorable for HPC and data mining, Ethiopia has become a popular location for these types of activities.

The dam’s ability to supply renewable energy at a reasonable price is in line with the miners’ demands for long-term, cost-effective power solutions for their energy-intensive processes.

There are larger economic and geopolitical factors that are supporting the entry of Chinese miners. Such endeavors now have a firm footing thanks to China’s growing engagement in Ethiopia, marked by substantial investments across a range of sectors.

Strategically important to China as an African partner, Ethiopia provides a welcoming environment for Chinese enterprises to grow their activities, including Bitcoin mining, further strengthening the connection.