IMF executives propose an 85% rise in crypto mining electricity costs through taxation to reduce emissions significantly. Public miners have raised $2.2 billion in response to financial pressures post-halving. The upcoming expiry of Bitcoin options may exacerbate sell pressure, risking a breach below crucial support levels.
Two International Monetary Fund (IMF) executives have proposed increasing global electricity costs for crypto miners by as much as 85% through taxation to significantly reduce carbon emissions. They suggested a tax of $0.047 per kilowatt-hour, aimed at encouraging the crypto mining sector to align its emissions with international climate goals, with further increases accounting for local health impacts potentially rising to $0.089 per kilowatt-hour.
This proposed tax is projected to elevate average electricity costs for miners by 85%, generate an annual government revenue of $5.2 billion, and reduce carbon emissions by 100 million tons yearly, which is equivalent to the annual emissions of Belgium. The IMF representatives also highlighted that a single Bitcoin transaction consumes electricity comparable to the three-year average usage of an individual in Pakistan, while contrasting it with the energy requirements of AI models like ChatGPT versus basic online searches.
In response to the financial strain post-halving, public mining companies raised approximately $2.2 billion during the second and third quarters of the year, with many turning to debt financing as traditional revenues faced pressure. Analysts noted the market’s volatility since the halving event, with Bitcoin prices remaining predominantly below $60,000.
As the expiry of $1.4 billion in Bitcoin options approaches on August 16, the cryptocurrency faces increased sell pressure. Current reports indicate Bitcoin price dipped over 3.6% within 24 hours, trading at $58,101, heightening the risk of breaching critical support levels unless a rebound occurs above $60,000.
