⚡️When the Tax Man Comes Knocking, Who's Gonna Pay?

The bi-partisan infrastructure bill is undergoing amendments in the Senate, but will the final language include wallets, node operators, and miners like the current language suggests?

Colin Harper
Colin Harper

Happy Tuesday, Luxor Mining faithful!

The entire Bitcoin industry is abuzz with Congress’ latest bill, a mammoth 2,700 page, bi-partisan attempt to enact more than $1 trillion in infrastructure projects over the next decade.

It includes provisions on the Bitcoin industry, primarily rewriting the definition of “Broker” in the tax code in order to include crypto business in its scope. The bill has had most industry professionals in a tizzy, considering the definition for broker is so vague it could include wallets, node operators, and potentially miners.

Incredibly, the bill spends 4 pages fitting the crypto industry into its tax code, and yet it projects that this industry could drum up $28 billion in tax revenue over the next decade, which is more than half of the $53 billion Congress seeks to raise from tax provisions in the bill.

And on that cheery note, let’s launch into things while your coffee is still hot.

Hashrate Index

Hashprice: Bitcoin’s hashprice profited from its positive price action last week, though July 31’s difficulty adjustment took it down a peg or two before it could breach $0.40. Currently, Hashprice is $0.33 TH/s/day, just below where it was during last Tuesday’s newsletter.

Hashrate: Hashrate dipped a negligible bit over the week, with the 7-day SMA currently reading 110.67 EH.

Rig Price Index: Rig prices across the board rose last week for the first time since they began free-falling in May. The weekly changes were:

  • Under 38 J/TH: $65.24(5%)
  • 38-60 J/TH: $45.60 (0.6%)
  • 60-100 J/TH: $26 (8%)
  • Over 100 J/TH: $17.59 (3%)

Crypto Mining Stock Index: We launched our Crypto Mining Stock Index last week, and we’re excited to make it a feature of our newsletter data going forward!

Since launching last Wednesday, the index is up 3.6%.

Mining News

Infrastructure Bill Seeks to Tax Crypto Industry

As we said in our intro, the bi-partisan infrastructure is under review in the Senate.

Of primary interest to the Bitcoin industry’s many players is the bill’s definition of ‘broker,’ which it deems “any person who (for consideration) is responsible for regularly providing any service effectuating the transfer of digital assets on behalf of another person.”

Put another way: any entity that oversees the transfer of cryptocurrencies from one party to another may be deemed a broker. A congressional spokesperson told CoinDesk that they don’t anticipate that the broker clause will apply to miners, only  “any person or entity acting as a broker by facilitating trades for clients and receiving cash, must comply with a standard information reporting obligation.”  Still, the Department of the Treasury would be tasked with implementing the tax provisions in the bill should it become law, so it remains to be seen how they will interpret this.

The Bill is largely bipartisan and is expected to make it through the House and the Senate, but even if it does, its provisions likely won’t take effect until 2023.

Genesis Digital Raises $125M To Expand In U.S., Iceland

Bitcoin mining firm Genesis Digital has raised $125 million in a bid to capture the influx of hashrate that is migrating away from China following the CCP’s crackdown on the industry.

Kingsway Capital, a U.K. private equity firm with $2 billion AUM, led the raise.

Genesis Digital plans to use the funding to build out datacenters in the United States and Iceland to house its rigs.

Stronghold Files for $100M IPO

Pennsylvania miner Stronghold Digital filed an s-1 last week with a plan to go public on the Nasdaq Global Market with the ticker SDIG.

Stronghold mines using waste coal, a biproduct from coal mining and refining that has a lower energy input than normal coal. Typically, this refuse is discarded and, if not disposed properly, ends up back in the environment as a major pollutant. Pennsylvania regulators rate waste coal as “environmentally friendly” as hydro power.

Happy Hashing!

-Luxor Team

Hashrate Index Newsletter

Colin Harper Twitter

Head of Content @ Luxor