Blog - Bitcoin mining

Bitcoin Mining in Canada: 2022 Recap and Future Prospects

05 Feb 2023
Bitcoin Mining in Canada: 2022 Recap and Future Prospects

Canada was poised to be a global leader in Bitcoin mining due to its access to abundant, low-cost, and sustainable energy, a highly skilled workforce, cold climate, and stable political environment. However, 2022 was a disappointing year for Bitcoin mining in Canada, with economic and political headwinds leading to a decline in its market share of global network hashrate. In this article, we will discuss the reasons behind this decline and the future prospects of the industry in Canada.

2022 Recap: Economic and Political Challenges

2021 was a record year for Bitcoin mining in Canada, with the country’s market share of global network hashrate peaking at 13%. However, 2022 turned out to be a challenging year with rising interest rates, falling asset prices, and the real economy slowing down, leading to a decline in the market share to 7-8%. Additionally, the price of Bitcoin fell 65% in 2022, and network difficulty rose 46%, leading to a decline in hashprice and miner revenue.

Legislation and Regulation Becoming a Headwind

The Canadian government proposed changes to the Excise Tax Act, which would declare digital asset mining not a commercial activity in the country. This proposal would increase the cost of Bitcoin mining and make Canada a less competitive jurisdiction, leading to a decline in investments in the industry. Moreover, governments in Ontario, Quebec, Newfoundland, Manitoba, and British Columbia removed electricity allocations for new mining operations, citing energy-use concerns. These policies underscore the challenges that miners face from Canadian legislators and regulators.

Is bitcoin mining still profitable in Canada

Future Prospects about bitcoin mining in Canada

Despite the challenges, Bitcoin mining remains an essential part of the digital asset space, and the industry continues to grow globally. Canada has the potential to be a leader in the industry, with its abundant energy resources and flexible electricity load. However, the government’s approach to Bitcoin mining needs to be more supportive, with policies that encourage growth and innovation in the industry. The Fair Tax Treatment for Responsible Digital Asset Mining Coalition has been successful in pausing the proposed tax change, and the industry continues to implore officials to consult with the industry to understand its needs and foster growth.

In conclusion, 2022 was a challenging year for Bitcoin mining in Canada, with economic and political headwinds leading to a decline in its market share of global network hashrate. The government’s proposed changes to the Excise Tax Act and the removal of electricity allocations for new mining operations have added to the challenges faced by the industry. However, Bitcoin mining remains an essential part of the digital asset space, and Canada has the potential to be a leader in the industry. The industry continues to implore the government to support growth and innovation, and the future prospects of Bitcoin mining in Canada remain bright.