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Cryptocurrency Miners Get AI Boost; Billionaires Trade Bitcoin Talks on X
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AI needs bitcoin miners.
to obtain
Bitcoin Miners Have the Power AI Companies Covet
Bitcoin miners have what AI vendors need: power. Many of the struggling mining companies now find themselves with the opportunity to sell data center services to deep-pocketed AI clients, thanks to their access to electricity.
Many of the mining companies have built their operations to take advantage of cheap commercial power in places like Texas and North Dakota. AI providers need a lot of juice—a ChatGPT query consumes 10 times more power than a Google search—and 14 publicly traded U.S. mining companies could spare about 3.6 gigawatts of the 5 gigawatts they currently control, a JPMorgan report found. The miners also have an additional 4.5 gigawatts in the form of contracts for power plants in development. Having enough power available is vital when you consider that building the high-performance computing (HPC) data centers that AI needs from scratch typically takes three to five years, with wait times for grid connections as long as six, according to the Lawrence Berkeley National Laboratory research center.
These 14 bitcoin miners saw their aggregate market value soar by 32.5% in the month to July 3, a stark contrast to bitcoin’s 13.5% decline and just a 4.9% rise in the S&P 500. It’s not an entirely smooth ride; HPC equipment has more stringent standards for cooling and clean air, but smaller AI players may not need to be as demanding as their larger competitors, and there’s a concept being developed that would focus on HPC and mine bitcoin only when there’s excess power capacity.
While some bitcoin miners — among them Riot (RIOT), CleanSpark (CLSK) It is Marathon Digital Holding (MARA)—are going the pure play route, including competitors Scientific Center (CORZ), Iris Energy (IREN) It is Applied Digital (APLD) are working to add HPC. “The reality is that AI companies can afford to pay more for this power because they don’t care,” says Kevin Dede, an analyst at HC Wainwright. “Their business model is stronger. With bitcoin mining, you have no idea what the price of bitcoin is going to be or how hard it is going to be to mine one, so you’re taking on a lot more risk.”
Full Story: Why These Bitcoin Miners Are Becoming the Hottest AI Stocks of the Summer
IRS Releases Cryptocurrency Reporting Rules to Curb Tax Evasion
The US Treasury will require Most cryptocurrency exchanges will disclose information about users’ trades from 2026 for transactions executed in the previous year, a requirement introduced to to guarantee that “digital assets are not used to conceal taxable income.” The department’s Internal Revenue Service said this is not a new tax — crypto investors have always been required to pay taxes on profits from crypto trading — but the reporting is intended to make it easier for traders to link their wallet addresses. For traders who do pay their taxes, the forms will simplify reporting, putting them on par with traditional securities. There is a new form for reporting, 1099-DA, and the IRS is maintaining a sketch released last year.
Decentralized exchanges, which are fully automated and never take possession of the cryptocurrency being traded, are exempt from the reporting requirement for now, though the Treasury may add them later. Also exempt until further guidance is given are several categories of transactions:
• Wrapping and unwrapping transactions
• Liquidity provider transactions
• Staking transactions
• Transactions described by digital asset market participants as digital asset loans
• Transactions described by digital asset market participants as short sales of digital assets
• Notional master contracts (swaps)
The main rules were published as Notice 2024-56 and the exemptions are Notice 2024-57. Read more about the regulations here.
Sources: Forbes Digital Assets, CoinGecko. Prices as of 4pm on 3 July 2024.
Billionaires Dell, Musk, Saylor Sling X Posts About Bitcoin
Michael Dell he was sprinkling X (formerly Twitter) with posts about bitcoin that could be a harbinger of the computer maker he founded becoming a senior hoarder of the cryptocurrency. Or he may simply have too much free time on his hands. “Scarcity creates value,” he posted on June 20. Later that day Michael Saylorwhose MicroStrategy is sitting on a treasure trove of 226,331 bitcoins worth over $13 billion, replied “Bitcoin is digital scarcity” and then Dell reposted this answer. Whether either statement is true is open to debate, but they seem to have each other’s attention.
Then, on June 28, Dell posted a “Most Important Thing” poll. Leading the pack was Bitcoin with 43.1% of the 64,035 votes cast, followed by Love and Relationships at 39.2% and AI at 9.3%, which perhaps says more about the type of people who read Dell’s posts than about what’s important. One of those readers is Elon Muskthe owner of X and founder of Tesla, which owns bitcoin, who replied: “Sentimental fool that I am, I clicked on ‘Love and relationships’.”
In another place
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