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Biden wants to make 30% taxes on crypto mining in the US. President Biden's proposal fails to acknowledge that crypto mining has positive effects on electricity grids. What awaits the whole crypto mining industry?
Didar Bekbauov, Founder and CEO of Bitcoin group mining company Xive, commented on this:
“The proposed tax may generate some short-term revenue for the government, but it would ultimately increase costs for consumers and diminish taxes paid by power plants, grid operators, and utility companies. Thus, I consider this policy to be shortsighted and counterproductive to promoting economic growth and innovation.
As far as the crypto industry is concerned, the tax will likely have short-term negative effects on the price of Bitcoin, but it will bounce back fast. Something similar happened in 2021 when China banned Bitcoin mining: the BTC price dropped but then recovered before long. The beauty of blockchain technology is in its decentralization. Any country can ban or restrict mining operations, but Bitcoin will not be fundamentally affected.
However, the tax will discourage investment and innovation in the crypto mining industry in the United States. This could have long-term implications for the development and adoption of new technology within Bitcoin, which relies on a robust and decentralized mining network.
Furthermore, if this policy comes to pass, current US crypto miners will definitely consider moving out of the country. 30% is a significant increase in the cost of doing business, so countries with lower taxes and more favorable regulation, such as UAE, Paraguay, or Argentina could become new leaders in the crypto mining sector”.
The views and opinions expressed in this article are solely those of the authors and do not reflect the views of Bitcoin Insider. Every investment and trading move involves risk - this is especially true for cryptocurrencies given their volatility. We strongly advise our readers to conduct their own research when making a decision.