Congressman Announces Relief For Crypto Miners in Debt Ceiling Compromise

Key Points:

• U.S. Congressman Davidson introduces the “Fiscal Responsibility Act of 2023” to prevent national default by raising the debt ceiling.
• Draft bill excludes Biden administration’s proposed 30% tax on cryptocurrency miners’ power usage.
• Crypto mining stocks soar as Bitcoin’s price surge offsets tax concerns.

Davidson, a Republican congressman, has proposed a draft bill called the “Fiscal Responsibility Act of 2023” that aims to prevent a national default by allowing the United States to raise its debt ceiling.

In a recent tweet, Davidson mentioned that the bill does not include a proposed tax on cryptocurrency miners, which the Biden administration has been advocating for. This tax would have amounted to 30% of the power costs incurred by miners.

Davidson’s tweet was in response to Pierre Rochard, Vice President of Research at Bitcoin mining firm Riot Platforms, who sought confirmation that the energy excise tax had been eliminated. The Biden administration had proposed the “Digital Asset Mining Energy excise tax” as part of this year’s budget, citing concerns about the negative impacts of the crypto industry.

Despite initial concerns, listed crypto mining companies in the U.S. experienced a resurgence in their stock prices. The price of Bitcoin has increased by over 65% this year, offsetting worries about the proposed tax. Shares of Riot Platforms on Nasdaq have risen by 77.8% since March 1, while Marathon Digital Holdings saw a 37.2% increase during the same period. This indicates that the removal of the tax threat has contributed to renewed investor confidence in these companies.

Furthermore, some U.S. states, including Arkansas, Montana, and Texas, have shown support for crypto miners. They have proposed legislation to protect the businesses of Bitcoin mining firms under the law, signaling a favorable environment for the industry.

The upcoming vote on the debt ceiling deal is scheduled to take place on May 31, and U.S. lawmakers will play a critical role in determining the fate of the proposed bill. If passed, it would allow the U.S. to raise its debt ceiling and avoid a potential national default. The exclusion of the cryptocurrency miner tax from the bill is seen as a victory for those in the industry and could further contribute to the positive momentum experienced by crypto mining companies in the stock market.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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