Electricity Arbitrage: Bitcoin Miners Run in Libya and Iran Amid Blackouts and Crackdowns

Bitcoin mining has become an electricity‑arbitrage trade in Libya and Iran, where deeply subsidized power makes even inefficient or second‑hand ASICs profitable. Iran legalized mining in 2019 with a licensing scheme but enforcement gaps left roughly 85% of operations unlicensed; mining has at times drawn over 2 GW, prompting seasonal bans and large seizures. Libya’s fragmented governance and rock‑bottom residential rates (reported as low as $0.004/kWh) created a shadow mining economy using smuggled or second‑hand miners in abandoned factories and homes; estimates once put Libya near 0.6% of global Bitcoin hashrate (~0.855 TWh/year). Authorities in both countries have stepped up crackdowns — mass raids, seizures of tens of thousands of machines, arrests and prosecutions under charges like illegal electricity use, import bans or money‑laundering — but legal frameworks remain ambiguous. The political‑economic drivers are clear: energy subsidies plus weak institutions convert public electricity into private revenue, worsening outages for civilians without transparent fiscal gains. For traders, the key implications are: cheap power and lax enforcement can rapidly shift global hashrate and support network security, while regulatory crackdowns, seasonal bans or power crises can quickly remove regional hash rate, trigger short‑term volatility, and concentrate sell‑pressure via seized or informal equipment channels. Monitor enforcement actions, seizure reports and regional grid stress — sudden drops in regional hash rate or reports of large equipment seizures can transiently affect miner profitability, miner‑linked equities and Bitcoin sentiment.