At the state level, there are a variety of approaches to embracing and regulating the bitcoin mining industry. Recognizing that bitcoin miners consume large amounts of energy, some states endeavor to tighten regulations on the industry or compel it to pay higher rates and embrace renewable energy.
Other states embrace pro-business views and welcome bitcoin miners. Texas looks to be in the latter camp, and that could be to the benefit of exchange traded funds such as the Invesco Alerian Galaxy Crypto Economy ETF (SATO).
In April, Texas legislators advanced HB 591 to Gov. Greg Abbott’s (R-TX) desk. That bill would provide tax relief to companies, including bitcoin miners and data center operators, that make use of natural gas that otherwise would not have been consumed. That’s a practical move for energy-rich Texas and could serve a two-fold purpose of providing use for excess natural gas while supporting the bitcoin mining industry’s efforts to move toward cleaner-burning sources of energy.
SATO, which debuted in October 2021, has 38 holdings, the bulk of which are crypto miners. That demonstrates the ETF’s correlations to bitcoin price action as well as potential leverage to encouraging political headlines, including the aforementioned Texas legislation.
For SATO Holdings, More Good Bitcoin News in Texas
HB 591 wasn’t the end of the good news for the bitcoin mining industry in Texas. In the waning days of the state’s legislative session, policymakers passed a bill that could be supportive of some SATO member firms. They also rejected a bill that experts believe could have crimped the industry.
Texas SB 1929 — the passed legislation — mandates that miners consuming than 75 megawatts (MW) register with the Public Utilities Commission (PUC) of Texas. That doesn’t imply new, cumbersome regulations. Rather, miners that need to file with the PUC receive “large load” status and could benefit from increased flexibility on the power grid.
HB 591 and SB 1929 put Texas on the list with Arkansas, Montana, and Wyoming, among others, as states that are signaling willingness to work with bitcoin miners. However, that’s not the case across the entirety of the U.S.
For example, New York recently introduced legislation that bars new bitcoin mining operators from using fossil fuels for at least two years. On the West Coast, Oregon lawmakers are considering legislation that would force bitcoin miners and data center operators to dramatically pare their greenhouse gas emissions.
For more news, information, and analysis, visit the Crypto Channel.
VettaFi LLC (“VettaFi”) is the index provider for SATO, for which it receives an index licensing fee. However, SATO is not issued, sponsored, endorsed or sold by VettaFi, and VettaFi has no obligation or liability in connection with the issuance, administration, marketing or trading of SATO.