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Today’s been a relatively volatile one for crypto mining stocks. However, this time, the volatility has favored investors.
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Indeed, some pretty strong moves are being seen in crypto mining stocks such as Canaan (NASDAQ:CAN), Hive Blockchain (OTCMKTS:HVBT), Bit Digital (NASDAQ:BTBT), SOS (NASDAQ:SOS) and Marathon Digital (NASDAQ:MARA). Each of these crypto miners are up big. With the exception of MARA stock, which is up “only” 4%, the other four crypto miners are seeing gains between 8% and 18% today.
Why the impressive upside?
Well, it appears most of these valuation bumps are due to the wording of a highly anticipated bill looking to tax the crypto sector. Let’s dive into what was announced, and why crypto mining stocks are rallying on this news.
Crypto Mining Stocks Higher on Crypto Tax Legislation
As part of the funding portion of the infrastructure bill recently updated by the U.S. Senate, crypto tax collection is included. The U.S. government estimates it can fund $28 billion of its $1 trillion package by going this route.
Now, taxes aren’t good for any group of stocks. Thus, today’s rise in crypto mining stocks may be a head scratcher at first.
However, the language of this bill is what has investors in crypto miners giddy. The bill doesn’t specifically call out crypto miners, as it was expected to. Rather, the bill leaves the definition of who must pay taxes as “any person who (for consideration) is responsible for regularly providing any service effectuating transfers of digital assets on behalf of another person.”
Experts suggest that taxing crypto miners would be difficult, due to the decentralized nature of the industry. No one person is responsible for keeping blockchains running, and identifying who to tax (outside of trading platforms and services providers) may have been too difficult for regulators. Right now, the lack of this potential headwind has sent the valuations of these companies higher.
Additionally, today Canaan appointed a new CFO, and Marathon ramped up its mining rig count. These announcements are generally being perceived positively, in light of this aforementioned news.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
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