United

Biden

Bitcoin

Green

The Biden Administration's proposed 30% tax on <a href="https://ultramining.com/news/en/minnesota-man-faces-accusations-of-electricity-theft-for-bitcoin-mining/">electricity</a> used by digital asset mining operations has sparked concerns among <a href="https://ultramining.com/news/en/hut-8s-q2-2023-a-bitcoin-mining-marvel/">crypto miners</a> about the future viability of their operations in the United States. Currently, U.S. miners account for over 29% of the total nodes on the Bitcoin network. However, the potential increase in operational costs may drive miners to explore more favorable regions, such as the Middle East, according to <a href="https://www.coindesk.com/consensus-magazine/2024/05/17/miners-eye-middle-east-as-next-region-for-growth/">Coindesk</a>. 
The Middle East presents an attractive alternative with its lower taxes, abundant energy resources, and less stringent environmental regulations. For instance, the government of Oman has invested over $800 million in crypto-mining operations, and the UAE contributes about 4% to the global Bitcoin mining hashrate with its 400 megawatts of mining capacity. 
Olivier Ohnheiser, CEO of Green Data City, an Oman-based crypto-mining firm, highlighted several advantages of the region: low electricity costs, reduced political risks, and favorable weather conditions for <a href="https://ultramining.com/news/en/crypto-miners-shift-gears-ai-is-the-new-gold-rush/">data centers</a>. Green Data City recently partnered with Phoenix Group, the UAE's largest digital asset mining firm, to establish a 150-megawatt crypto farm in Salalah, southern Oman. 
In 2023, Digital Marathon (MARA) and Abu Dhabi's sovereign wealth fund-backed Zero Two initiated a $406 million joint venture to build the Middle East's first immersion-cooled Bitcoin mining plant. This innovative cooling technology mitigates the challenges posed by the region's high temperatures, ensuring optimal performance of mining equipment. 
Kyle Shneps, Director of Public Policy at Foundry, warned that the proposed electricity tax could severely impact the U.S. crypto mining industry, stating, “A 30% tax on the electricity used by bitcoin miners would assuredly kill the industry in the United States. It would set a really dangerous precedent.” Darin Feinstein, founder of <a href="https://ultramining.com/news/en/bitcoin-mining-giant-core-scientific-prepares-for-post-bankruptcy-comeback/">Core Scientific</a>, echoed these concerns, suggesting that the tax could drive investment and technology to more welcoming environments. 
The recent Bitcoin halving, which reduced block rewards, has further complicated the economics for miners. High <a href="https://ultramining.com/news/en/minnesota-man-faces-accusations-of-electricity-theft-for-bitcoin-mining/">electricity prices</a> and older mining equipment may push U.S. miners to relocate to regions like the Middle East, where such regulatory pressures are currently absent. 
Despite these challenges, some industry leaders believe the U.S. remains a crucial hub for digital assets. Anthony Scaramucci of Skybridge Capital remarked, “The U.S. offers an ecosystem that is ripe for innovation and growth, with many of the leading crypto firms and projects already here.” 
As U.S. miners face increased regulatory scrutiny, the decision to stay or relocate will hinge on the balance between operational costs and the potential benefits of emerging markets like the Middle East.&nbsp;

Miners Eye Middle East as Next Hub Amid US Regulatory Hurdles

Ultramining_Eng

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