Paraguay's Bitcoin Mining Boom Faces Crunch Time as Contracts Expire
Bitfarms has expanded its operations in Paraguay, doubling its capacity at the Yguazu site to 200 MW through an amendment to its power purchase agreement. The company now uses hydropower at 3.9 cents per kWh, a significant drop from Argentina's subsidized electricity rate of $0.03/kWh.
The move is part of a larger trend in Paraguay, where large-scale infrastructure players like HIVE Digital are dominating the market with high-tension infrastructure that secures lower rates. Medium-tension rates have risen to $0.06/kWh from $0.03/kWh, and smaller operators like Alps are considering Bolivia and Venezuela due to the increasing costs.
The Paraguayan government has also established a new tariff structure for AI and high-performance computing with a 15-year price outlook denominated in USD. HIVE is using Bitcoin mining profits to build Tier III+ AI data centers in Canada, while Penguin Group is shifting its focus from Bitcoin mining to AI compute as the current ANDE contract expires on December 31, 2027.