Kazakhstan collects taxes on mining, stablecoin or affects short-term credit.
Kazakhstan’s president kassym Jomart Tokayev signed a new law on taxes and other mandatory budget payments, which will impose additional charges on electricity used by energy intensive industries such as cryptocurrency mining. According to ZB Research Institute, the bill was passed by the Senate of Kazakhstan in early June and signed by the president of Kazakhstan on July 2. The bill stipulates that additional taxes of about US $0.0023/kwh will be levied on cryptocurrency miners.
Some analysts believe that Kazakhstan’s move is more moderate than China’s ban on enterprise cryptocurrency mining. After the implementation of Kazakhstan’s new law on “tax and other mandatory budget payments”, it will undoubtedly have an impact on the market. Although there are more and more cryptocurrency friendly economies in the world, such as El Salvador, energy constraints are bound to restrict the development of mining industry.
According to the relevant statistics of ZB Research Institute on July 2, the total income of bitcoin miners in June 2021 was about US $839 million, which was about 42% lower than that in May. As a comparison, the total income of Ethereum miners (block rewards and transaction costs, excluding MEV) in June was about $1.11 billion, down about 52.8% from May.
ZB Research Institute believes that the energy restriction has seriously affected the market activity. According to the data of BTC browser, the block time of 18:27 to 20:46689301 high block on July 1, Beijing time has reached 139 minutes, and the block was finally excavated by the U.S. mine. According to the ZB Research Institute, the difficulty of bitcoin mining on June 14 was reduced by 26%, which is the biggest difficulty reduction in history. The problem of too long block time has been solved in the short term, but the final solution is still how to improve the income of miners.
Affected by the decline in miners’ income, rising costs, market conditions and other related factors, the seven day moving average of the number of active bitcoin addresses fell to 758165 on Wednesday, the lowest level since April 2020. The decline in active user participation indicates weak demand. The hype cycle from the beginning of 2021 to April of 2021 makes the value of some currencies over inflate. At present, the inflation period has ended, and the market has formed a high threshold for new entrants, resulting in a depressed trading pattern in June.
In a recent report, Jamie Dimon, JPMorgan’s chief executive, said that with the increasing popularity of blockchains running more energy-efficient networks than bitcoin and Ethereum, Staking will become a source of income for institutional investors and retail investors. According to the report, the pledge will bring about $9 billion in revenue to the cryptocurrency industry every year. Some analysts believe that after the formal launch of Ethereum 2.0, the transformation from Ethereum to proof of equity will strongly stimulate the consensus mechanism of the current blockchain industry, and it is likely to further push up the pledge value, reaching US $40 billion in 2025.
On July 2, it was reported that Robinhood, a US stock and crypto trading application company, has submitted an IPO application to the SEC, according to the relevant information obtained by ZB Research Institute from the US Securities and Exchange Commission (SEC). It is planned to raise a maximum of 100 million U.S. dollars. It is reported that the issuance is led by Goldman Sachs, JPMorgan Chase, Barclays Bank, Citigroup, Wells Fargo, Mizuho Bank and others.
According to news on July 2nd, although El Salvador has passed the relevant bills of the “Bitcoin Act”, the Japanese Senate has not yet affirmed the status of Bitcoin as a currency of other countries. Some analysts believe that the attitude of the Japanese Senate stems from the concern that bitcoin, as legal tender, may break away from the existing law on fund liquidation.
ZB Research Institute believes that Japan’s practice of denying bitcoin as the legal currency of other countries and refusing to include it in the category of foreign currency recognition actually represents the interests of large and medium-sized economies still under the US dollar system. El Salvador’s incomplete implementation of bitcoin legalization process (that is, the implementation of bitcoin and US dollar dual track currency) will slow down the process of bitcoin’s participation in Global trade.
On July 2, Fitch, a world-renowned credit rating agency, said that the rapid growth of stablecoin issuance may have an impact on the operation of short-term credit markets. USDT issuer Tether disclosed that as of March 31, 2021, only 26.2% of its reserves were cash, trust deposits, reverse repurchase notes and government securities, and 49.6% were commercial paper. As of June 30, 2021, Tether-related total assets reached $62.8 billion. The large-scale redemption of stablecoins will inevitably affect the operation of the short-term credit market, and will further affect the global cryptocurrency pledge income.