Ethiopia Halts Crypto Mining Permits Amid Power Shortage
Ethiopia has suspended the issuance of new electricity permits for crypto mining as its hydropower-dependent grid reaches capacity amid a severe power shortage. To date, 25 Bitcoin mining operations hold active licenses, while about 20 more applications are pending. The pause aims to balance national energy demands by restraining rapid crypto mining expansion in regions with unstable electricity supplies. Existing miners may continue under current permits. Low power costs and ample water resources initially attracted firms. The government’s move highlights the critical role of reliable renewable energy in sustainable crypto mining and may drive companies to reassess local plans or seek alternative locations. Other African nations could follow suit by reviewing power infrastructure before hosting large-scale mining projects.
Neutral
In the short term, Ethiopia’s suspension of new crypto mining permits is unlikely to sway global Bitcoin supply or market price materially, since local operations account for a minor portion of total network hashrate. Existing miners can continue, so selling pressure remains steady. Over the long term, restricting new licenses could curb future miner-driven sell-offs to cover electricity costs, which might offer mild support to Bitcoin prices. Yet, mining firms are expected to redirect expansion plans to other low-cost energy regions, offsetting any supply constraints. Therefore, the net effect on BTC price remains neutral.