Sweden is making a significant move that could impact bitcoin miners, as the country plans to eliminate tax incentives for data centers from July 2023. This move could affect bitcoin miners who have turned to Sweden to increase their profitability, and it could also lead to an increase in electricity costs.
Sweden’s decision to eliminate tax incentives for data centers could inhibit new investments in the region. The November 2022 financial budget report reveals that Sweden will increase electricity tax from SEK 0.006 ($0.0006) to SEK 0.36 ($0.035) per kilowatt hour (kWh) from July 2023. Currently, Sweden is home to miners who use around 150 megawatts (MW) of power. However, raising this tax would increase electricity costs to $0.093/kWh, according to Jaran Mellerud, a senior analyst at Luxor Technologies, a crypto mining provider. He added that placing electricity costs at such levels would mean using MicroBT Whatsminer M30s, a moderately efficient bitcoin mining chipset, would only break even at current market conditions.
In summary, Sweden’s decision to eliminate tax incentives for data centers and increase electricity tax could lead to an increase in electricity costs for bitcoin miners, making it more difficult for them to remain profitable.