How Cheap Power Turned Libya into a Bitcoin Mining Hotspot – TradingView News

Key takeaways

Libya’s cheap, subsidized electricity has made it profitable to operate even older, inefficient Bitcoin miners.

At its peak, Libya generated an estimated 0.6% of the global Bitcoin hash rate.

Mining operates in a legal gray zone, with hardware imports prohibited but no clear law governing mining itself.

Authorities are now linking illegal mining farms to power shortages and stepping up raids and criminal cases.

In November 2025, Libyan prosecutors quietly handed down three years in prison to nine people caught running Bitcoin miners in a steel factory in the coastal city of Zliten.

The court ordered the seizure of their machines and the return of the illegally generated profits to the state, the latest in a series of high-profile raids that have spilled from Benghazi to Misrata and even netted dozens of Chinese nationals operating industrial-scale farms.

Yet these crackdowns target an industry that, until recently, most outsiders didn’t even know existed. In 2021, Libya, a country better known for oil exports and rolling blackouts, accounted for about 0.6% of the global Bitcoin hash rate. That put it ahead of every other Arab and African state and even several European economies, according to estimates from the Cambridge Center for Alternative Finance.

This improbable rise was fueled by cheap, heavily subsidized electricity and a long period of legal and institutional uncertainty that allowed miners to spread faster than lawmakers could respond.

In the sections that follow, we’ll unpack how Libya became a clandestine mining hotspot, why its network is now under severe pressure, and what the government’s increasing crackdown means for Bitcoin BTCUSD miners operating in fragile states.

Did you know? Since 2011, Libya had more than a dozen competing governments, militias, or political power centers, creating long periods in which no single authority could impose energy or economic policy at the national level.

The economics of “almost free” electricity

Libya’s mining boom is starting with a number that seems almost unreal. Some estimates put the country’s electricity price at about $0.004 per kilowatt hour, one of the lowest in the world. This level is only possible because the state strongly subsidizes fuel and keeps rates artificially low, even if the network struggles with damage, theft and underinvestment.

From an economic perspective, such prices create a powerful arbitrage for miners. They effectively buy energy far below its actual market cost and convert it into Bitcoin.

For miners, this completely changes the hardware equation. In high-cost markets, only the newest, most efficient ASICs stand a chance of remaining profitable. In Libya, even older generation machines that are scrap metal in Europe or North America can still generate a margin, as long as they are fed with subsidized power.

This naturally makes the country attractive to foreign operators willing to send used rigs and accept legal and political risk.

Regional analysis suggests that at its peak around 2021, Bitcoin mining in Libya consumed about 2% of the country’s total electricity output, about 0.855 terawatt-hours (TWh) per year.

In a rich, stable network, that level of consumption can be manageable. In Libya, where blackouts are already part of daily life, diverting so much subsidized power to privately run server rooms is a serious issue.

On the global mining map, the USA, China and Kazakhstan still dominate in absolute hash rate, but Libya’s slice stands out precisely because it is achieved with a small population, damaged infrastructure and cheap electricity.

Did you know? Libya loses up to 40% of its generated electricity before it ever reaches homes due to network damage, theft and technical losses, according to to the General Electricity Company of Libya (GECOL).

Inside Libya’s underground mining boom

On the ground, Libya’s mining boom looks nothing like a shiny data center in Texas or Kazakhstan. Reports from Tripoli and Benghazi describe rows of imported ASICs plugged into abandoned steel and iron factories, warehouses and fortified compounds, often on the outskirts of cities or in industrial areas where heavy electricity use doesn’t immediately raise eyebrows.

Did you know? To evade detection, some operators in Libya reportedly pour cement over parts of their setups to blur heat signatures, making it harder for authorities to spot them with thermal imaging.

The timeline of enforcement shows how quickly this underground economy grew. In 2018, the Central Bank of Libya declared virtual currencies illegal to trade or use, citing money laundering and terrorism financing risks.

But by 2021, analysts estimated that Libya accounted for about 0.6% of the global Bitcoin hash rate, the highest share in the Arab world and Africa.

Since then, raids have revealed how deep the activity runs. In April 2024, security forces in Benghazi seized more than 1,000 devices from a single hub believed to be making around $45,000 a month.

A year earlier, authorities arrested 50 Chinese nationals and allegedly seized around 100,000 devices in one of the continent’s largest crypto busts.

In late 2025, prosecutors handed down three years in prison against nine people who turned a Zliten steel factory into a clandestine mining farm (the inspiration for this article).

Legal experts quoted in local media say operators are gambling that flat electricity prices and fragmented management will keep them one step ahead. Even if a few large farms are taken down, thousands of smaller rigs spread across homes and workshops are much harder to find and together add a serious burden on the network.

Banned, but not exactly illegal

On paper, Libya is a country where Bitcoin should not exist at all. In 2018, the Central Bank of Libya (CBL) issued a public warning that “virtual currencies such as Bitcoin are illegal in Libya” and that anyone using or trading them would have no legal protection, citing risks of money laundering and terrorist financing.

However, seven years later, there is still no dedicated law that clearly prohibits or licenses crypto-mining. As legal expert Nadia Mohammed told The New Arab, Libyan law did not expressly criminalize mining itself. Instead, miners are usually prosecuted for what surrounds it: illegal electricity consumption, importing prohibited equipment or using proceeds for illegal purposes.

The state has tried to close some loopholes. A 2022 Economy Ministry order bans the import of mining hardware, but machines continue to enter via gray and smuggling routes.

The country’s cybercrime law goes further by defining cryptocurrency as “a monetary value stored on an electronic medium … not linked to a bank account,” effectively recognizing digital assets without saying whether it is legal to mine them.

That ambiguity contrasts with regional peers. Algeria has moved to a blanket criminalization of crypto use, trading and mining, while Iran operates a patchwork of licensing and periodic crackdowns linked to its subsidized electricity and power shortages.

For Libya, the result is classic regulatory arbitrage. The activity is risky and has been frowned upon but not outright banned, making it extremely attractive to miners willing to work in the shadows.

When miners and hospitals share the same roster

Libya’s Bitcoin boom is plugged into the same fragile grid that keeps hospitals, schools and homes running, often just barely. Before 2022, parts of the country experienced outages lasting up to 18 hours a day as war damage, cable theft and chronic underinvestment left demand far ahead of reliable supply.

In that system, illegal mining farms add a constant, energy-hungry burden. Estimates cited by Libyan officials and regional analysts suggest that at its peak, crypto-mining consumed about 2% of national electricity output, roughly 0.855 TWh per year.

The New Arab notes that this is power effectively diverted from hospitals, schools and ordinary households in a country where many people are already used to planning their day around sudden outages.

Officials have sometimes put eye-popping numbers on individual operations, claiming that large farms can draw 1,000-1,500 megawatts, the equivalent of several mid-sized cities’ demand. Those numbers may be exaggerated, but they reflect a real concern within the electricity company: “Always-on” mine loads could undo recent improvements and push the grid back toward blackouts, especially in the summer.

There is also a broader source story. Commentators link the crypto crackdown to a wider energy and water crisis, where subsidized fuel, illegal connections and climate stress are already straining the system.

Against that backdrop, every story about clandestine farms turning cheap, subsidized power into private Bitcoin income risks deepening public resentment, especially when people are left in the dark while the rig keeps running.

Regulate, tax or stamp it out?

Libyan policymakers are now divided over what to do with an industry that clearly exists, clearly consumes public resources, but technically lives in a legal vacuum.

Economists quoted in local and regional media argue that the state should stop pretending mining doesn’t exist and instead license, measure and tax it. They point to Economy Ministry Decree 333, which banned the importation of mining equipment, as evidence that authorities already recognize the sector’s scale and suggest that a regulated industry could bring in foreign exchange and create jobs for young Libyans.

Bankers and compliance officers take the opposite view. For them, mining is too tightly linked to electricity theft, smuggling routes and money laundering risks to be safely normalized.

Unity Bank’s systems director has called for even tighter rules from the Central Bank, warning that the rapidly growing crypto use – an estimated 54,000 Libyans, or 1.3% of the population, already hold crypto in 2022 – is outpacing existing security measures.

This debate extends beyond Libya. Across parts of the Middle East, Africa and Central Asia, the same formula appears again and again: cheap energy, weak institutions and a hungry mining industry.

Analysts at CSIS and EMURGO Africa note that without credible regulation and realistic energy prices, mining could deepen power crises and complicate relations with lenders such as the International Monetary Fund, even if it looks like easy money on paper.

For Libya, the real test is whether it can move from ad hoc raids and import bans to a clear choice: either integrate mining into its energy and financial strategy or shut it down in a way that actually sticks.