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Bitcoin 30% Miner Tax Nixed, Pro-Mining Bill passed - Week 39

Bitcoin 30% Miner Tax Nixed, Pro-Mining Bill passed - Week 39

May 31, 2023

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News

Texas Legislature Sessions Ends with 3 Major Outcomes

Last week, the Texas Legislature concluded its voting session, making crucial decisions on various bills.

The process involved committee hearings, debates, amendments, and final votes in both the House and Senate. Approved bills were then sent to the governor for final approval or veto, shaping the future of Bitcoin in Texas. Here are the major Bitcoin bills and their outcomes.

SB1751 - Anti-Mining Bill

According to Brian Morgenstern, head of public policy at Riot Platforms, the defeat of SB 1751 guarantees that Bitcoin miners in Texas can maintain their flexibility in balancing and stabilizing the power grid through demand response. This ensures that the state can continue utilizing Bitcoin miners' capabilities in contributing to grid reliability.

SB1929 - Pro-Mining Bill

Texas achieved a significant milestone with the successful passage of SB 1929, which established a registration process for Bitcoin miners.

This process requires miners to share information with ERCOT, improving transparency and grid reliability.

HB 591 was approved in another positive development, providing a tax incentive for Bitcoin miners to utilize gas that would otherwise be wasted through flaring.

Texas Bans Fractional Reserve Banking for “Crypto-Banks

Texas has passed HB 1666, introducing a proof-of-reserves regime that enhances transparency and trust in the Bitcoin industry. The bill mandates regular verification and reporting of reserves by cryptocurrency companies, safeguarding consumer interests and promoting a secure framework.

The state’s commitment to regulation and fostering innovation solidifies its position as a leading destination for the crypto industry.

Some critics note that this hinders the process in which Bitcoin companies could gain more users by requiring more red tape. The increased laws and legal ramifications could slow the adoption in Texas, and others vocalize that this would be a good thing to protect investors. Local news covered it here.

Federal Excise Tax Defeat

According to Yahoo Finance, the recent U.S. debt ceiling deal does not include President Joe Biden's proposed 30% tax on energy used for Bitcoin mining, viewed as positive news for the cryptocurrency industry.

This exclusion spares Bitcoin miners from potential financial burdens and clarifies their operations in the United States.

Tether Announces Mining

Tether has announced investments in sustainable Bitcoin mining operations in Uruguay, prioritizing renewable energy sources. Tether aims to promote eco-friendly Bitcoin mining practices and reduce carbon emissions by supporting the expansion of renewable energy infrastructure.

The impact on the facility's size is not specified, but historically, Bitcoin mining has contributed to grid stability and capacity improvements in developing countries.

tether-invests-in-energy-production-and-sustainable-bitcoin-mining-in-uruguay

Price

Year-to-date, Bitcoin has gone from a low of $16,000 to upwards of $32,000+. It has gone up more than 64% this year, becoming one of the best-performing assets of the year.

For half of this time, the price has stayed sideways, but the consistent move upward and holding of the $16,000 floor shows Bitcoin’s resilience.

When comparing previous bottoms, bitcoin has shown to be a mover in this time frame based on the 4-year cycle. Will it mimic the previous cycles as an average, or will it choose a new path? The next halving is only 331 days away.