Abu Dhabi’s Sovereign Wealth Fund Leads UAE’s Bitcoin Mining Expansion

2 min read

The United Arab Emirates (UAE) has emerged as a significant player in the world of Bitcoin mining, thanks to the efforts of Abu Dhabi’s sovereign wealth fund. This strategic move has turned the UAE into a thriving center for BTC mining, driven by political stability, an entrepreneurial mindset, and abundant energy resources.

As global attention focuses on this Middle Eastern powerhouse, Jaran Mellerud, a Business Development Associate at Luxor, explores the fascinating story of how Abu Dhabi’s sovereign wealth fund is propelling the UAE’s Bitcoin mining expansion to new heights.

Bitcoin Mining – A Collaborative Vision

At the forefront of this ambitious endeavor is Abu Dhabi’s sovereign wealth fund, acting as the catalyst for the UAE’s ascent in Bitcoin mining. In late 2021, their digital asset arm, Zero Two (formerly FS Innovation), partnered with the local bitcoin mining company Phoenix Technology. The result? A massive 650 MW hydro-cooled mining farm in Abu Dhabi, with an astounding $2 billion investment, solidifying its position as the largest single bitcoin mining site ever.

“In the realm of Bitcoin mining, size does matter, and the UAE is ensuring it competes in the major leagues,” commented Jaran Mellerud, a prominent figure in the crypto space.

The ambitious spirit of Abu Dhabi’s sovereign wealth fund didn’t stop there. In February 2023, Zero Two strengthened its position by joining forces with the renowned US public miner, Marathon. This partnership led to the establishment of two immersion-cooled facilities in Abu Dhabi, with a combined capacity of 250 MW. Zero Two will own 200 MW, while Marathon will operate the remaining 50 MW.

“The collaboration between Zero Two and Marathon exemplifies the UAE’s commitment to solidifying its position as a serious and ambitious player in the global bitcoin mining landscape,” explained industry expert Jaran Mellerud.

Setting the Benchmark

With these groundbreaking initiatives, the UAE has positioned itself as the leading nation for bitcoin mining in the Middle East. While neighboring countries have substantial energy resources, it is the UAE’s innovative prowess that puts it at the forefront of the industry.

“All these energy-rich countries may have enormous Bitcoin mining potential, but the innovative UAE is leading the way,” emphasized Mellerud.

While the UAE’s abundant energy resources have undoubtedly contributed to its mining success, the country’s commitment to expanding its electricity supply reinforces its dominance. As an OPEC member and one of the world’s top oil producers, the UAE has utilized its position to diversify its energy sources.

“The UAE is rapidly expanding its electricity supply, surpassing the pace of North American and European consumers,” explained Mellerud.

The UAE’s efforts have led to the opening of Barakah, the largest nuclear power plant in the Arab world, generating an estimated 19% of the country’s electricity. Additionally, plans are underway for a massive solar buildout, capitalizing on the power of the UAE’s vast, sun-drenched deserts.

Bitcoin Mining as a Catalyst for Energy Flexibility

The marriage of Bitcoin mining and the UAE’s expanding electricity supply holds tremendous potential. Bitcoin miners possess a unique advantage as flexible electricity consumers, capable of providing much-needed demand flexibility to inflexible nuclear-powered grids.

“Bitcoin miners are highly flexible electricity consumers and can contribute to demand flexibility, especially in inflexible nuclear-powered grids,” highlighted Mellerud.

By capitalizing on this synergy, the UAE’s electricity system can reduce its seasonal-dependent demand, enhancing efficiency and resilience.

Mellerud concluded, “The UAE is rapidly expanding its electricity supply, surpassing the pace of North American and European consumers,” adding, “Overall, the UAE will become an increasingly significant BTC mining country over the next few years, potentially serving as a case study for other