Home Biden’s tax plan sparks crypto industry backlash

Biden’s tax plan sparks crypto industry backlash

President Joe Biden’s proposed 30% tax on crypto mining power faced criticism for potentially harming the industry and erasing investor wealth.

The resurgence in Bitcoin and other cryptocurrency values has brought Bitcoin (BTC) back into the spotlight, prompting an unexpected shift in stance from Donald Trump towards cryptocurrencies.

Bitcoin’s value recently soared past $71,000, surpassing its 2021 all-time high before dropping well under $70.000. This surge not only spotlighted Bitcoin but spurred growth in the prices of cryptocurrencies like Ethereum (ETH), XRP, and Solana (SOL). BlackRock — the world’s premier asset management firm — foresees a crypto market expansion to $90 trillion.

Meanwhile, U.S. President Joe Biden faces criticism for policies perceived as harmful to the crypto industry, potentially erasing billions in investor wealth. In a contentious move, the Biden administration has revisited the idea of imposing a 30% tax on crypto mining operations, which rely on high-energy computing for transaction verification and network security. According to the “General explanation of the administration’s fiscal year 2025 revenue proposals” dated Mar. 11, 2024:

Any firm using computing resources, whether owned by the firm or leased from others, to mine digital assets would be subject to an excise tax equal to 30 percent of the costs of electricity used in digital asset mining.

This proposal, as outlined by the U.S. Treasury in its 2025 revenue plan, could severely impact the mining sector, leading to significant losses in investor value, according to Taras Kulyk of SunnySide Digital:

“Implementing a blanket 30% federal tax on digital mining will certainly kill the sector and wipe out billions of dollars of investor value virtually immediately in the U.S.”

Senator Cynthia Lummis, a crypto advocate, warned that such a tax could decimate the industry’s presence in the U.S. Yet, some interpret the White House’s budget as showing strong confidence in crypto’s revenue-generating potential, suggesting an underlying bullish stance on Bitcoin and digital assets.

Featured image: ideogram

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Radek Zielinski
Tech Journalist

Radek Zielinski is an experienced technology and financial journalist with a passion for cybersecurity and futurology.

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