3rd May 2023 > > The US and the UK.

tl;dr

The US government makes public its antipathy towards cryptos, whilst the UK government tries to hide its own prejudice against cryptos.

Market Snap (at time of writing)

Market Wrap

A minor dip below $28k yesterday was met again with some sustained buying, the second time in a week we have seen that phenomenon, perhaps indicating a convergence of views amongst the techie community.

Meme coins (PEPE especially) continue to dominate some channels of crypto discourse, but please ignore that chatter. You don’t want to be someone else’s exit liquidity.

Curious Cryptos’ Commentary – US mining tax

It seems that the politicisation of cryptos continues apace.

The White House has announced a Digital Asset Mining Energy Tax of 30% of electricity costs for miners:

https://www.whitehouse.gov/cea/written-materials/2023/05/02/cost-of-cryptomining-dame-tax/

The justification for this tax is predictable, cloaked as it is in a veneer of environmental concerns, which are unlikely to be sincerely held, and about which there is considerable debate. The statement itself recognises that:

“… the potential for cryptomining to relocate abroad—such as to areas with dirtier energy production—is a concern …”.

One of the false tenets of this statement is a claim that miners using clean energy increases “… overall reliance on dirtier sources of energy”. BTC miners drive investment in clean energy, increasing the supply. BTC miners also increase the reliability of electricity supply – in many cases they have a legal obligation to curtail or stop mining when demand is high, or supply is threatened. A secure energy grid is of unquantifiable value, something the UK will soon find out to its cost under current policies.

This tax is predicted to raise “… $3.5 billion in revenue over 10 years” a pitifully small sum when set against the US debt pile of $31 TRILLION dollars which is constantly increasing:

https://usdebtclock.org/

The Republican controlled House is unlikely to accept this tax charge on crypto miners. It is possible that this proposal has been made simply to reinforce the political dividing line being drawn with regards to cryptos, which is disappointing to me.

Curious Cryptos’ Commentary – The UK

Rishi Sunak, Prime Minister of the UK, once made this bold claim:

“It’s my ambition to make the U.K. a global hub for crypto-asset technology, and the measures we’ve outlined today will help to ensure firms can invest, innovate and scale up in this country.”

Lisa Cameron, MP, and chair of the Crypto and Digital Assets Group, stated at a recent conference:

“I’m an advocate for getting regulation in place that makes the most of the potential of the sector whilst protecting consumers.”

Which is about as bland a statement as one could ask for.

The use of “Digital” in the title of the group she chairs probably refers to CBDCs (Central Bank Digital Currencies) which has been the focus of attention for lawmakers and regulators in the UK.

Last June the UK introduced the Financial Services and Markets Bill which included an element of stablecoin regulation, and the creation of a new class of assets – DSAs (digital settlement assets). As far as I am aware, these plans have been quietly shelved (please correct me if I am wrong).

The UK remains an unwelcome place for the crypto industry.