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Biden Wants To Tax Crypto Mining Right Out of the US

Plus Balaji ends his $1m Bitcoin Bet

Author

Nathaniel Whittemore
May 03, 2023

5. Balaji Loses the Bet

Balaji has conceded his million dollar Bitcoin bet, paying pseudonymous tax enthusiast James Medlock $1M in USDC of which half was donated. Despite Bitcoin not hitting one million dollars and the US dollar not hyperinflation, Balajis seems to consider the money well spent. He explained that he just “burned a million to tell you they're printing trillions”.

4. DCG Pays back loan, But Bigger Loan Coming Due

Digital Currency Group revealed that they paid back a $350 senior secured term loan last quarter. Also in the letter to DCG shareholders was a note that CFO Michael Kraines had stepped down. DCG is still embroiled in the Genesis bankruptcy and the pressure is on. Court assigned mediation should begin imminently as DCG still has a $630M loan to Genesis coming due next week.

3. Policy Errors incoming

Happy Fed day to those that celebrate! Fed Funds futures markets have almost entirely priced in a 25bp hike will be announced, but think this is the end of the hiking cycle. An April survey of Digital Asset Fund Managers from Coinshares found that 62% of respondents thought the Fed had already made a policy error, while a further 22% said “not yet”. The banking system is showing signs of stress…let's see if the same goes for Powell this afternoon!

2. Coinbase and Gemini head offshore

With limited options in the US Coinbase and Gemini both opened trading for their perpetual contracts markets, but only for non-US customers. Coinbase is offering 5x leverage to institutions only. Gemini are going full FTX (minus the fraud, hopefully) with 100x leverage and much broader access. Both exchanges confirmed a desire to remain in the US, but say US regulators are a problem.

1. Biden Admin wants to tax mining

Speaking of the USG being a problem, in their most openly hostile action to date, the Biden Administration has proposed a 30% tax on US Crypto mining, citing climate concerns. It’s hard to see it as anything but a punitive and designed to kill the industry in the US. It’s unlikely to make it through Congress, but a good reminder to Bitcoiners that they’re not immune from the US’s current crypto hostility.

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Thanks for reading -NLW