The proposed crypto-mining tax by the Biden administration will push the industry offshore. The Block reports, citing Marathon Digital CEO Fred Thiel.
The tax aims to curb the mining sector’s impact on climate change. However Thiel argues that it will not lead to more available renewable energy; on the contrary, it will reduce it.
“Installing a solar farm or wind farm takes about two years. It is Bitcoin miners who provide the economic incentive for these people to operate,” he said.
Thiel also said Marathon Digital faces a range of obstacles to its operations from banks and from operators of gas-fired power plants.
“Mining in Texas eliminates the need for peaking capacity, which hurts their business,” he explained.
Thiel contends that there is a broader initiative within the Biden administration aimed at the crypto markets that, even if it does not kill Bitcoin, will significantly impede people’s ability to operate.
Marathon Digital, for its part, is weighing options to expand outside the United States. Earlier this month the company announced a project to build mining farms in Abu Dhabi. It is also studying opportunities in other jurisdictions, including Paraguay.
Thiel expressed hope for consolidation in the mining sector after a prolonged period of stress in the market.
“We have lived through the worst periods of crypto winter. I think, with the rise in Bitcoin’s price, people are more optimistic,” he added.
Earlier in May the Biden administration proposed a 30% tax on electricity used in cryptocurrency mining.
The 2024 fiscal year budget also proposes changes to the taxation of cryptocurrency transactions. Officials estimate this would raise industry revenues to $24 billion.