IMF executives suggest an 85% increase in electricity costs for crypto miners via taxes to cut emissions significantly. Public miners are dealing with financial strain post-halving, having raised $2.2 billion so far. The impending expiry of $1.4 billion in Bitcoin options threatens to increase selling pressure, with Bitcoin trading volatile ahead of this event.
Two International Monetary Fund (IMF) executives have proposed elevating global electricity costs for cryptocurrency miners by up to 85% through taxation. They argue that such increases could significantly reduce carbon emissions associated with crypto mining. Recently, a tax of $0.047 per kilowatt-hour was suggested to encourage miners to align with global emissions goals. If considering local health impacts, the tax proposal rises to $0.089 per kilowatt-hour, which could generate an additional $5.2 billion annually for governments while reducing emissions by 100 million tons, equivalent to Belgium’s total emissions.
The executives highlighted the stark electricity consumption of Bitcoin mining, equating a single transaction to the equivalent energy usage of an average Pakistani over three years. In comparison, the AI model ChatGPT reportedly consumes ten times more energy than a standard Google search. However, this raises debates about the overall emissions of the crypto mining sector relative to other industries, such as the 71.54 million metric tons of carbon dioxide emitted by Amazon in 2021, surpassing Bitcoin’s estimated 65.4 million metric tons.
Amidst the anticipated impacts of the 2024 Bitcoin halving event, public mining firms have sought alternative financing options, having raised $2.2 billion from Q2 to Q3 of this year. Analysts have speculated that reduced mining rewards are already straining miners, compelling nine out of thirteen major US mining companies to pursue debt financing as Bitcoin’s price remains volatile and generally below $60,000 recently.
The impending expiry of over $1.4 billion worth of Bitcoin (BTC) options on August 16 may induce significant selling pressure, potentially lowering Bitcoin’s price beneath critical support levels. As of August 15 at 8:35 am UTC, Bitcoin traded at $58,101, having dropped over 3.6% in the prior 24 hours. This trend suggests heightened volatility in the market as the options expiry approaches, with potential repercussions on Bitcoin’s stability unless a rapid recovery to above $60,000 occurs at expiry time.
