Today in cryptocurrency, IMF executives have proposed an 85% increase in electricity costs for crypto miners through taxation to curtail carbon emissions. Meanwhile, public mining firms have secured $2.2 billion in debt to address financial strains. Additionally, Bitcoin faces potential pressure as $1.4 billion in options expire, risking a drop below $56,000.
On August 15, two executives from the International Monetary Fund (IMF) proposed a significant increase in global electricity costs for crypto miners, suggesting a tax could raise rates by up to 85%. This taxation strategy aims to motivate the mining industry to reduce carbon emissions, contributing to global climate objectives. The IMF officials indicated that a tax of $0.047 per kilowatt hour could generate $5.2 billion annually for governments and reduce emissions by 100 million tons.
In their analysis, Hebous and Vernon-Lin highlighted that a single Bitcoin transaction consumes electricity equivalent to the amount used by an average Pakistani over three years. They acknowledged debates surrounding crypto emissions compared to other sectors, referencing Amazon’s substantial carbon footprint of 71.54 million metric tons in 2021, exceeding Bitcoin’s estimated 65.4 million metric tons.
Data reveals that public mining firms have raised approximately $2.2 billion in debt financing in Q2 and Q3, largely as a response to the cash problems following the recent Bitcoin halving event. Analysts note that the halving has pressured miner revenues due to diminished rewards, exacerbated by Bitcoin price trends which have lingered below $60,000.
The impending expiry of over $1.4 billion in Bitcoin options on August 16 is anticipated to exert additional sell pressure on the cryptocurrency. With Bitcoin trading at $58,101 as of 8:35 am, concerns mount that prices may breach the critical support level of $56,000 if a recovery above the $60,000 mark does not occur. Historical patterns show that periods around options expiry often induce heightened market volatility.
