The clash between the cryptocurrency industry and the powers-that-be in Washington has reached a boiling point, with the White House throwing a massive side-eye towards Bitcoin and its energy-hungry mining operations. As BTC’s price soars to heights unseen since 2021, reaching a whopping $60,400, it seems to have triggered more than just investor frenzy; it’s got the U.S. government hot under the collar about the implications for our already stretched-thin power grid.
Reports have surfaced, courtesy of Charles Gasparino of Fox Business, that the administration is not just sitting back and watching. The surge in Bitcoin’s value, and the mining frenzy it fuels, has apparently led to some sleepless nights over at 1600 Pennsylvania Avenue, with concerns over how this crypto craze is juicing up the demand for electricity.
The rise of Bitcoin to its current glory is not just a cause for celebration among crypto enthusiasts; it’s also ringing alarm bells at the White House. The administration has been vocal about its worries, pointing out that the Bitcoin mining process is not just an energy guzzler but a massive burden on the nation’s power infrastructure. Reportedly, this is about ensuring that our energy resources are not being devoured by an industry that seems to have an insatiable appetite for electricity.
The White House has been on this beat for a while, having previously floated the idea of a Digital Asset Mining Energy (DAME) excise tax back in May 2023. Their beef? The “economic and environmental cost” of crypto mining, which, in their view, is a price too steep for the rest of us to pay. Remember the proposal to slap a 30% tax on the electricity used by Bitcoin miners?
As the Biden Administration laid out its plans for the fiscal year 2024, it made it clear that Bitcoin mining is in its crosshairs. The DAME tax is set to phase in over three years, targeting the energy consumption and environmental impact of mining operations.
This proposed tax is part of a broader critique of the crypto mining industry, with the administration questioning the sector’s economic and societal contributions. Despite the considerable energy use, the White House contends that crypto mining fails to deliver the local and national economic benefits that typically justify such consumption.
But let’s not just take the government’s word for it. Critics from the crypto corner argue that the administration’s concerns are overblown, a knee-jerk reaction to a misunderstood and evolving industry. They warn that such regulatory moves might not just stifle innovation but could also trigger unintended consequences in the quest for cryptocurrency dominance.
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