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Up until quite recently, Texas was “very open for business, as it were, for Bitcoin mining.” That’s how Jaime Leverton, CEO of Canadian Bitcoin miner Hut 8, put it on the latest episode of Decrypt’s gm podcast.
“They have in West Texas, in particular, a lot of renewable assets that are looking for stable base loads like a Bitcoin miner can provide,” she said. “So I think it was just a really, really nice fit between the needs of the state and what a Bitcoin miner can uniquely provide as really an industrial-scale battery.”
That symbiotic relationship has worked because unlike data centers, whose always-on client agreements make voluntarily shutting down impossible, Bitcoin miners can cut their power consumption when there’s a lot of demand on the grid. (“We scale up and down within minutes on a regular basis based on the needs of the grid,” Leverton said.) And so far, the Electric Reliability Council of Texas (ERCOT) has been willing to extend incentives to miners that do it.
But a bill introduced in March, Texas Senate Bill 1751, seeks to limit those benefits granted to Bitcoin miners that cut their power consumption when Texas, which has a power grid independent from the rest of the U.S., is experiencing high demand.
On Tuesday, the bill was unanimously approved in a state Senate committee vote.
It still needs to win approval from the full Senate before it heads to the state’s House of Representatives and then Governor Greg Abbott’s desk. But Texas Blockchain Council President Lee Bratcher sees the bill as cause for concern.
He told Decrypt in an email that he expects it can win approval in the Senate, but not the Texas House.
“SB-1751 is a concerted effort by established industry groups in the ERCOT marketplace to tilt the playing field in their favor because they cannot compete with Bitcoin miners when it comes to load flexibility,” Bratcher said.
On Twitter, Satoshi Act Fund CEO and co-founder Dennis Porter said he and Pierre Rochard, Riot Platforms vice president of research, spent 8 hours in the Texas capitol on Tuesday, “to share our opposition to the anti-#Bitcoin mining bill in the Senate.”
Myself and @BitcoinPierre spent 8 hours at the Capitol in Austin today. We engaged with 18 offices including the Speaker of the House as well as House State Affairs to share our opposition to the anti-#Bitcoin mining bill in the Senate. pic.twitter.com/wF38441DAQ
— Dennis Porter (@Dennis_Porter_) April 4, 2023
Meanwhile, Hut 8 told Decrypt in an email on Wednesday that although the company will soon have operations in the state once it completes its pending merger with US Bitcoin, it won’t comment on the bill at the moment because it doesn’t currently mine in Texas.
Despite that fact, Hut 8, which trades on both the Nasdaq and Toronto Stock Exchange under the HUT ticker, was among the publicly-traded mining companies to take a tumble the day after the SB-1751 vote. Its shares ended trading on Wednesday down 6%.
Similarly, Marathon Digital (MARA) was down 7%; Riot Platforms (RIOT) fell 4%; and Canaan (CAN) fell 2%.
Andrew Asmakov contributed reporting to this story.
Listen to the full episode and subscribe to the gm podcast.