3 - 5 minute read
Texas is known for being one of the largest hubs in the world for bitcoin mining due to its deregulated grid, low electricity prices, and renewable energy options. However, a new bill sponsored by Republican state senators Lois Kolkhorst, Donna Campbell, and Robert Nichols could make the state less attractive for bitcoin miners. The bill aims to nix tax breaks and demands miners using more than 10 megawatts (MWs) to register as flexible load operators with state grid operator ERCOT.
The Texas Senate committee unanimously approved Senate Bill 1751 in a 10-0 vote on April 4. If passed, the bill could restrict miners’ participation in the demand response scheme to just 10% of the total program. Under current conditions, miners are rewarded for shutting down when demand is high, so that the power gets redirected to the grid.
Bitcoin miners across Texas are using 75% more power than last year, around 2,100 MW, Reuters reported citing figures from Texas Blockchain Council president Lee Bratcher. That’s about 3.7% of the lowest forecast peak load and almost triple power used in 2021. However, Texas’ grid has suffered deadly outages during heat waves and wintery storms over the past few years, making consistent energy supply a hot-button issue for local voters.
The bill is next headed to the Texas Senate for a floor vote before it moves on to the House. Dennis Porter, CEO of bitcoin mining advocacy firm Satoshi Action Fund, tweeted that the bill will eliminate incentives for miners to create jobs in rural communities. “Unfortunately members of the committee were swayed by the influence of the powerful bill sponsor,” Porter said. “There is talk it could also pass through the Senate. It will be critical to fight back against the bill in the House in order to kill the bill.”
What Does This Mean for Traders?
This bill could have significant implications for traders and the asset in question. Texas has been a popular destination for bitcoin miners due to its favorable conditions, but with the potential passing of this bill, it could make the state less attractive for bitcoin miners. This could result in a decrease in mining activity in Texas and potentially affect the overall supply and demand of bitcoin.
The Impact on Bitcoin Mining in Texas
The passing of this bill could have a major impact on bitcoin mining in Texas. Riot Blockchain, one of the most prominent Texas-based crypto miners, is among the firms that benefited from the state’s incentives. Last year, the miner raked in as much as $9.5 million in power credits because it shut down its rigs multiple times. With the potential elimination of these incentives, it could result in a significant decrease in profits for mining companies.
Furthermore, the bill could restrict miners’ participation in the demand response scheme to just 10% of the total program. This could potentially limit the amount of power available to bitcoin miners during peak demand times, resulting in a decrease in mining activity.
The passing of the bill could make Texas less attractive for bitcoin miners and potentially affect the overall supply and demand of bitcoin. It’s important for traders to keep an eye on the developments of this bill and conduct thorough research before making any investment decisions. Trading carries high risk and it’s essential to seek professional advice before investing in any asset. The bill is next headed to the Texas Senate for a floor vote before it moves on to the House, where it will be critical to fight back against the bill in order to kill it.