Texas has emerged as the dominant hub for bitcoin mining in the United States, with the state accounting for 28.5% of the country’s total bitcoin hashrate as of July 2023. The migration of miners to Texas can be attributed to the region’s pro-crypto regulatory environment and support from the local energy provider, ERCOT. Miners from southern and midwestern states such as Nebraska, North Carolina, Kentucky, and Oklahoma have flocked to Texas, seeking abundant clean energy and a permissive regulatory climate. Texas has solidified its position as the bitcoin capital of the world, drawing in miners with its favorable conditions.
Kevin Zhang, Foundry’s senior vice president of business development, has a long history in the bitcoin mining industry and is confident in its resilience. Despite facing obstacles like China’s ban on bitcoin in 2013 and the recent Covid-19 pandemic, Zhang has remained resilient and continues to double down on mining operations during challenging times. However, the upcoming “halving” event in April 2024 poses a new challenge for miners. The mining reward for each block of transactions will be cut in half, potentially leading to reduced revenues for miners. Despite this, Foundry remains optimistic and is expanding its operations into machine sales, deployment, logistics, and managed site services, showing its commitment to the long-term success of bitcoin mining.
Texas’s dominance in bitcoin mining is also attributed to its favorable energy policies and support from ERCOT. ERCOT, facing fluctuating energy prices and sporadic service, strikes deals with flexible energy buyers like bitcoin miners to ensure excess energy is used during low-demand periods. This partnership benefits both parties, as miners receive cheap energy, while ERCOT can efficiently manage its energy grid. Research has shown that Texas’s increasing integration of wind and solar energy into its grid creates ideal conditions for bitcoin mining. Miners can take advantage of negative energy pricing in Texas by getting paid slightly more than they would earn from mining bitcoin, while excess energy can be put back into the grid during high-demand periods. Overall, Texas’s support from local authorities and energy providers has played a crucial role in its emergence as the premier bitcoin mining destination in the United States.