Higher cryptocurrency prices recently have restored interest in digital coin minting in Vietnam. Crypto mining is once again seen as an investment opportunity with other options being limited by the ongoing coronavirus pandemic that has been affecting the Asian country.
Vietnam’s Sales and Prices of Crypto Mining Rigs Spike in September
Demand for crypto mining equipment has increased in Vietnam following the market recovery that saw the price of BTC moving back above the $50,000 threshold, Vnexpress reported. Prices of hardware used to mint bitcoin, ethereum, and other cryptocurrencies have also risen as many Vietnamese miners are now looking to buy mining components.
Speaking to the online newspaper, Quang Thuan, owner of several crypto hardware shops in Ho Chi Minh City, noted that a few months ago the mining rig market was gloomy after the leading cryptocurrency fell below $30,000 in July. However, he revealed that his sales have tripled earlier this month compared to the August volumes.
Two key factors have facilitated this recovery, according to Le Hung, administrator of a Vietnamese crypto mining group with 80,000 members. “First, Bitcoin, Ethereum and other cryptocurrencies have simultaneously seen price hikes, and miners have started to make profits,” he said in a conversation with the Vietnamese news outlet, further elaborating:
Second, the pandemic (Covid-19) has prolonged, reducing investment options, and so more people have opted for coin mining.
A crypto entrepreneur from Vietnam’s southern province of Dong Nai provided more insight about the funds needed to start a mining business right now. “It cost me nearly VND3 billion ($130,400) to set up this mine,” said Ngoc Van who recently established an ethereum mining facility. “All rigs are new and stable. I hope I can recoup the investment in six months,” he added.
While Vietnamese miners can purchase graphics processing units (GPUs) and assemble their own rigs, they can also buy fully assembled mining machines, including rigs from China, where an ongoing crackdown on the industry has closed numerous mining farms. “On average, a rig is sold for VND30 million ($1,300),” said another owner of a hardware store in Ho Chi Minh City.
According to Ngoc Van, however, the best-selling devices are equipped with video cards produced by the leading graphics chip manufacturers AMD and Nvidia, and are more expensive. The prices of these rigs vary between 80 and 100 million Vietnamese dong at the moment, or $3,500 – $4,400. That’s around 5 million dong ($220) higher than in mid-August.
Vietnam is yet to properly regulate cryptocurrencies and related business activities. In May this year, the government in Hanoi commissioned a research group for that purpose and the Finance Ministry said it’s conducting an in-depth study of the matter. Cryptos are not recognized as a means of payment and the State Bank of Vietnam has previously issued warnings about the risks of owning, trading, and using them.
According to data from Statista released in February, the country had the second-highest rate of cryptocurrency use among 74 surveyed economies, driven by remittances, Vnexpress noted. A poll conducted by Finder in 27 countries showed last month that Vietnam holds the highest percentage of crypto ownership.
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Vietnam’s Ministry of Justice has submitted а report to the government in Hanoi that contains a review of the current legislation and an assessment of cryptocurrency-related business activities in the country. The authors of the document have also made a number of proposals about changes they consider necessary.
Vietnamese authorities have not taken a final decision on cryptocurrencies yet. The country’s central bank has clearly stated that it does not recognize them as legal tender. In July, the bank said it’s not involved in any efforts to manage the circulation of bitcoin in Vietnam and warned that virtual coins cannot be used for payments. In July, the Vietnamese securities regulator told companies and investment funds to stay away from cryptocurrencies. Prime Minister Nguyen Xuan Phuc ordered relevant agencies to draft a legal framework for cryptocurrencies and the industry built around them.
Cryptocurrency mining has become a source of income for many Vietnamese companies and ordinary citizens, but the business of minting digital coins is not exactly popular with some Vietnamese authorities. This past summer, the country’s Finance Ministry proposed a suspension of imports of mining equipment – a measure that the State Bank of Vietnam and the Ministry of Public Security supported. According to statistical data provided by the General Department of Vietnam Customs, more than 27,000 mining components have been imported into the country in 2017 and over 15,000 in the first five months of this year.
Business and individuals in Vietnam used to import a large number of crypto mining rigs into the country. Last year, the Customs Department of Ho Chi Minh City (HCMC) cleared more than 7,000 bitcoin and litecoin miners. Meanwhile, the Customs Department of Hanoi imported 190 bitcoin miners and 350 litecoin miners, Vietnam Biz reported Wednesday.
The lack of crypto mining rig imports follows the proposal by the country’s Ministry of Industry and Trade “to suspend the import of cryptocurrency mining machines in a move to improve the management of currency transactions in the country,” the publication detailed.
Investors and board members of Ho Chi Minh City-based Sky Mining have expressed fears that the company’s chief executive officer, Le Minh Tam, has fled the country and run away with approximately $35 million USD in investors funds.
According to local media, Bitmain will be opening a bitcoin mining facility in a former aluminum plant in Rockdale.
Mining company Tmgcore has acquired a “$60 million USD, 150,000-square-foot data center” in Plano, Dallas, according to local media.