Ethiopia Cuts Power to Bitcoin Miners Amid Hydropower Crisis

Bitcoin miners in Ethiopia have been hit hard by power cuts, as the country's hydropower system struggles to keep up with demand. According to a recent report, Ethiopia has reduced electricity supplied to Bitcoin miners to just 23% of contracted levels after reservoir inflows dropped 20%. This move is due to El Niño-induced dry conditions in the region, which have strained the country's hydropower system.

The restrictions come as no surprise, given that Bitcoin miners consume almost one-third of Ethiopia's electricity output and generated 35% of Ethiopian Electric Power's revenue last fiscal year. The company plans to reassess reservoir and electricity conditions in October, with further cuts possible if water levels do not improve.

Analyst Saifedean Ammous has also pointed out that global Bitcoin mining electricity use and capital spending may have peaked in 2024-2025. He notes that the block subsidy awarded to miners is reduced by half roughly every four years, which means that mining rewards are declining. To keep up with this trend, Bitcoin's price would need to increase by more than 18.92% annually, but it has actually lost over 35% in value over the past 12 months.