White House Tax Plan Threatens Bitcoin Miners’ Bottom Line—Here’s Why It Matters

The Biden administration just dropped a regulatory bomb on crypto—and miners are scrambling.

The 30% electricity tax: A direct hit to mining profitability

Buried in the latest budget proposal, the Digital Asset Mining Energy (DAME) excise tax could force operations offshore or spark another mining migration. Texas facilities? Suddenly less attractive when Washington takes a third of your power budget.

Industry backlash meets political posturing

Mining execs call it a 'targeted kill shot' while climate hawks cheer. Meanwhile, Treasury officials pretend this won't accelerate the inevitable exodus to Kazakhstan and Paraguay—where environmental standards are, shall we say, flexible.

The real casualty? Innovation

When the US chokes its crypto golden goose, guess who's ready with open arms? Dubai. Singapore. Even El Salvador—where that volcano-powered mining looks smarter by the day.

Funny how DC suddenly cares about energy usage when Wall Street's AI data centers guzzle ten times more juice. But sure—let's blame the Bitcoiners.

Key tax change for miners

The report, released by the White House’s Working Group on Digital Asset Markets, urges the IRS and Treasury to clarify when bitcoin mining and staking income should be recognized for tax purposes.

Currently, miners are taxed on the fair market value of bitcoin at the time it is mined, rather than when it is later sold.

Lu explained the significance of this distinction:

“If miners can report income from bitcoin’s point of sale in the future, their reported income numbers will greatly change.”

This change WOULD align bitcoin with other extracted commodities such as gold, which are taxed when sold, not when mined.

It could also eliminate what many in the industry view as double taxation—miners currently pay income tax when the bitcoin is mined and capital gains tax when sold if the price has increased.

Strategic bitcoin reserve

The report also confirmed that President Trump’s proposed strategic bitcoin reserve will be managed by the Treasury and funded through forfeited digital assets, though full details have not yet been released.

The potential tax change is seen as a step toward integrating bitcoin into mainstream financial reporting and usage categories.

Legislation and industry reception

Several bills in Congress, including H.R. 8149 and the Responsible Financial Innovation Act, are aiming to defer tax on mining and staking rewards until the assets are sold.

The WHITE House report suggests Congress should carefully consider how such rules might apply to bitcoin and other digital asset rewards.

U.S. miners resilient despite tariffs

Despite concerns regarding tariffs on mining equipment, Lu believes U.S. miners can remain competitive by leveraging affordable and increasingly renewable energy sources.

BitFuFu, ranked as the 13th largest public bitcoin miner, recently reported mining 467 BTC in July and achieving a record 38.6 EH/s hashrate.