Bitcoin and the rest of the market prepare for yet another slump as President Joe Biden’s budget proposal would subject cryptocurrency miners to a 30% tax on electricity expenses in a bid to “limit mining activity.”
In accordance with a letter published by the treasury dept., any company using resources, whether they are owned or rented, would be “subject to an excise tax equal to 30% of the costs of power used in digital asset mining.”
The Treasury cited “negative environmental effects,” “increased pricing for individuals using a grid shared with the businesses,” and “uncertainty and hazards to local utilities and communities” as reasons for imposing the tax.
“An excise tax on electricity usage by digital asset miners could reduce mining activity along with its associated environmental impacts and other harms.”
Additionally, it was proposed that the tax would start on January 1 and be phased in over three years at a rate of 10% per year, increasing to the maximum tax rate of 30% by the third year. The tax was also said to take effect after December 31.
The plan sparked a lot of controversy within the crypto community and crypto-friendly political organizations. The Biden administration’s handling of crypto assets, according to Republicans in the U.S. House of Representatives, poses a threat to the budding industry.
Republicans concede that the trillion-dollar market for digital assets is growing in a new document they have sent to the members of the House Committee on Financial Services.
Bitcoin’s Crowd Interest Surge
The congressmen also warned that due to the regulations put forth by the Biden administration during the previous two years, the crypto business in the US is now in danger of being driven abroad.
Recall, when Ripple CEO Brad Garlinghouse urged US authorities to create a regulatory framework, warning that without one, the country would lose its competitive edge in the crypto industry.
The Republicans continued by urging lawmakers to provide clear regulatory rules for the crypto industry and coordination between enforcement authorities in order to stop this.
While Bitcoin as well rest of the altcoin troupe have been trading in the red, leading data analytics Santiment showed that this price dip comes at a time when the social discussions surrounding Bitcoin have been one-third of the top 100 assets.
High bitcoin discourse, according to the platform, is a fear sign, which historically can turn around markets, TronWeekly reported.