Petro warns fossil-fuel crypto mining will trigger climate collapse. Paraguay offers cheap hydro power at $0.037/kWh, but Colombia remains untouched.
Colombian President Gustavo Petro drew a sharp line across Latin America's crypto mining expansion this week, warning that any Bitcoin (BTC) production reliant on fossil fuels will "erupt" into global warming and climate collapse. The statement, posted on social media, immediately reframes the investment thesis for the region's cheapest energy markets, where hydroelectric surpluses and stranded gas compete for the same mining rigs.
Petro's warning is not a regulatory proposal. It is a political signal that splits the sector into two risk buckets: operations running on clean power, which are being courted as development tools, and operations burning hydrocarbons, which now carry explicit reputational and potential policy risk. For traders and investors mapping mining exposure across Latin America, that split matters because energy cost is the single largest variable in mining economics. Petro's intervention accelerates a sorting that was already underway.
Petro stated that "if virtual currencies rely on fossil fuels, global warming and climate collapse will erupt." The conditional framing is important because Colombia itself does not mine Bitcoin at scale. It is a declaration of intent from a head of state who wants to attract mining investment, but only on his terms. He pointed to Venezuela and Paraguay as examples of countries with clean energy that are already drawing miners.
The immediate market implication is that Latin America's mining landscape is hardening into two tiers. Tier one is hydro-rich jurisdictions where electricity is cheap, renewable, and politically endorsed. Tier two is everywhere else where power generation depends on natural gas, diesel, or coal, and where a future carbon penalty or outright ban could reset breakeven costs overnight. Petro's words do not change the cost curve today, but they add a layer of political risk that mining operators, hosting providers, and ASIC financiers must now model.
For anyone holding exposure to mining equities, the question is which bucket the largest operations fall into. The readthrough from Petro's statement is that hydro-dominated countries will see a lower cost of political capital going forward, while fossil-dependent regions may face steeper permitting hurdles and higher insurance premiums.
Petro specifically cited Paraguay, which holds the title of the world's fourth largest Bitcoin (BTC) hashrate behind the United States, Russia, and China. That ranking is not a coincidence. It is a direct function of the Itaipu and Yacyreta hydroelectric dams, which produce more power than the country can consume domestically. The surplus has turned Paraguay into one of the most attractive mining destinations on the planet, with industrial electricity tariffs ranging from $0.037 to $0.050 per kilowatt-hour.
At those rates, a modern ASIC pays for its power draw within roughly 15 to 20 months depending on Bitcoin price, which compresses the payback period relative to North American hosting rates that often sit above $0.07/kWh. The readthrough from Petro's endorsement is not that Paraguay will get cheaper still. It is that a neighboring head of state is publicly holding up Paraguay as the model. That political validation reduces the risk that the Paraguayan government will reverse its friendly stance, which some miners had feared after years of grid strain and political churn. It also greenlights institutional allocators who have ESG mandates but want Bitcoin exposure; Paraguay's hydro story is the easiest pitch.
For the broader sector, Paraguay's hashrate dominance shows that low-cost renewable power is a durable moat. When Petro says Venezuela is also attracting mining, the contrast becomes clearer: Venezuela's potential is tied not to low-cost power but to a grid so broken that energy is effectively stranded. The economics are different, and the risk profile is radically higher.
Venezuela banned Bitcoin mining outright last year, citing an energy crisis where demand hit a nine-year peak and the grid could not keep up. Yet Petro mentioned the country as a mining destination, likely referring to the pockets of production near large generation sources where power cannot be evacuated to population centers because transmission lines are degraded or absent.
This is the stranded-energy thesis in its purest form: mining rigs co-locating with generation to monetize megawatts that would otherwise be flared or wasted. The problem is enforceability. Venezuela's central government has already demonstrated that it will shut down mining when politically convenient. The recent ban saw thousands of machines confiscated, and while some operations have quietly restarted in remote areas, the legal framework is zero. Ownership seizure risk is real. For any publicly traded mining company, Venezuela is uninvestible. For private capital with a high tolerance for geopolitical chaos, the economics might still work on a spot basis, but the exit risk is extreme.
The takeaway from the Venezuela mention is not that it is a hidden gem. It is that Petro is willing to lump together functioning hydro grids and broken petro-states under the same clean-energy label. That rhetorical move widens the definition of what counts as acceptable mining geography, which could later be used to justify Colombian government support for operations in its own Caribbean region.
Colombia itself is a blank slate. The 2026 State of Bitcoin Mining in Latin America report from Hashrate Index did not mention Colombia at all, not because mining is banned, but because the country simply lacks the infrastructure, hosting capacity, and regulatory clarity to register on the map. Petro's statement now puts a marker down: the government sees mining as a potential driver for the Caribbean coast, specifically naming Santa Marta, Riohacha, and Barranquilla as possible hubs.
This is the most consequential paragraph for investors. Colombia has abundant hydroelectric capacity, with roughly 70% of its electricity coming from dams. The Caribbean region also sits near natural gas deposits and offshore wind potential, but transmission constraints limit how much of that power can reach industrial loads. Mining can theoretically solve that constraint by sitting at the source, much like the stranded-energy model Petro sees in Venezuela, except in a country with far stronger property rights and a functioning legal system.
The gap between vision and reality is wide. There are no large-scale colocation agreements, no established hosting infrastructure, and no tax framework tailored to digital asset mining. Building that ecosystem will require capital, time, and political consistency, all of which are scarce in Colombia's volatile policy environment. The regulatory catalyst traders should watch is whether Colombia's energy ministry follows Petro's statement with a formal framework for mining licences or a clean-energy certification scheme. If such a framework materialises, it would effectively open a new jurisdiction for mining investment, and the first-mover advantage would go to developers who can source site permits, power purchase agreements, and ASIC procurement simultaneously.
Until then, Colombia is a narrative trade. The positive readthrough for the sector is that another Latin American country is talking about mining as development rather than a threat. The risk is that talk remains just talk, as it has in other countries where political rhetoric outruns regulatory follow-through.
Petro's comments reinforce a pattern visible across the region: crypto market analysis shows mining capital is migrating toward two poles – cheap renewable power and regulatory clarity. Paraguay scores high on cheap power but moderate on regulatory clarity; its hashrate is growing but the legislative landscape remains patchy. El Salvador, not mentioned by Petro, scores lower on cheap power but higher on regulatory certainty thanks to its Bitcoin legal tender law and explicit mining promotion.
Brazil and Argentina have significant mining activity, driven by flare gas in Argentina and hydro in Brazil, but both carry their own basket of currency and policy risks. The readthrough from Petro's intervention is that a third model is emerging: the ideologically aligned clean-energy mining jurisdiction, where government endorsement lowers the cost of political capital and unlocks institutional flows that cannot touch fossil-dependent operations.
One tactical implication: miners who secure long-term power contracts in hydro-rich Latin American countries now carry a "Petro premium" in the form of reduced regulatory overhang, at least relative to peers in jurisdictions where carbon risk is rising. The converse is that any mining operation burning natural gas or diesel is now one executive order away from a headline that echoes Petro's "climate collapse" warning, which could reprice equity valuations even if the physical operation is unaffected.
For traders who track mining stocks, the key metrics to follow in Latin America are the spread between local electricity tariffs and the global average post-halving break-even hashcost, and the pace of new hosting capacity coming online in Paraguay and, eventually, Colombia. If Petro's words translate into a Colombian mining bill, the region's supply dynamics could shift faster than the market currently prices. Conversely, if Venezuela's ban widens or Paraguay faces grid pressure and tariff revisions, the cheap-power trade could lose some of its lustre.
The core takeaway is not that Petro's statement changes anything overnight. It is that climate politics are now permanently embedded in the mining location decision, and Latin America is becoming the frontline where that decision plays out.
Drafted by the AlphaScala research model and grounded in primary market data – live prices, fundamentals, SEC filings, hedge-fund holdings, and insider activity. Each story is checked against AlphaScala publishing rules before release. Educational coverage, not personalized advice.