Why a buried tax detail in the White House’s crypto report could be a game-changer for bitcoin miners

The Block

Aug 05, 2025 21:10:30

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Buried within the White House's recent 168-page crypto report last week was a tax section on bitcoin mining that could have substantial implications for the industry and broader mainstream adoption of the asset in the long term, according to BitFuFu.

The White House's Working Group on Digital Asset Markets released the long-awaited report on Wednesday, outlining recommendations to usher in a "golden age of crypto."

The group's members, including Treasury Secretary Scott Bessent and SEC Chair Paul Atkins, called on Congress to build on the Digital Asset Market Clarity Act recently passed by the House. Additionally, they urged swift implementation of the GENIUS Act, which President Trump recently signed into law to establish federal rules for stablecoins, and highlighted the need to modernize crypto tax laws and reduce compliance burdens.

Though sparsely mentioned, the report also confirmed that President Trump's proposed strategic bitcoin reserve and separate digital asset stockpile will be managed by the Treasury, funded through forfeited digital assets. While specifics on the bitcoin reserve are still pending, officials said more details will follow soon.

So what's the big deal?

Many in the crypto industry expressed enthusiasm for the report overall. However, one section that went somewhat under the radar was a potential game-changing impact on bitcoin miners, BitFuFu Chairman and CEO Leo Lu told The Block via email.

"The report contains notes relevant to bitcoin miners that may go under-represented, especially when it came to light that the document didn't discuss bitcoin reserves as much as anticipated," Lu said.

Among the most important, in the executive's view, is that the report urges the IRS and Treasury to clarify the timing of income from crypto staking and mining, and whether it should change.

Currently, bitcoin mining income is taxed based on its fair market value at the time it's mined, not when the bitcoin is eventually sold, Lu explained. In contrast, commodities like gold are taxed based on their fair market value at the time of sale, not when they're extracted.

"That's important because bitcoin is treated by a growing number of investors like gold, in that it's a diversified investment, and that both are extracted assets. If miners can report income from bitcoin's point of sale in the future, their reported income numbers will greatly change."

It could also eliminate what is effectively double taxation under the current rules. Right now, miners pay tax on the income when bitcoin is mined and capital gains when it's later sold, if prices rise. Delaying income recognition until the point of sale would simplify taxes and avoid taxing the same bitcoin twice.

Furthermore, though still limited, the report notes that some banks are beginning to extend credit and loans to digital asset operations, including bitcoin mining.

"The implications can snowball from there," Lu continued. "If bitcoin is integrated into more mainstream income reporting categories, this change would join the throng of other adoptions that will make bitcoin an everyday asset, even currency, according to financial institutions."

The BitFuFu CEO argues that depending on how quickly a change in guidance could be enacted through legislation, "everyday consumers might see bitcoin as an average spending or investment option in their own lives."

Several bills have been introduced in Congress aiming to change how mining and staking rewards are taxed, the White House crypto report noted. One bill, H.R. 8149 (2024), proposes deferring tax until the rewards are sold, while others, like the Responsible Financial Innovation Act, S. 2281 (2023), suggest deferring only de minimis amounts of income until sale.

"If Congress decides to pass legislation regarding the timing of the inclusion of income relating to mining or staking, Congress should consider whether similar rules should apply to rewards from other digital asset validation methods, what the character of income upon disposition should be and if ordinary, what rules should apply to determine the order of dispositions of ordinary versus capital units, and potential differences between the fair market value of rewards at the time of receipt compared with the fair market value of rewards at the time of sale or other disposition," the report states.

Not worried about Trump's tariffs

While some bitcoin mining companies have expressed concerns about President Trump's tariffs in recent weeks, from increases in miner costs to difficulties finding affordable U.S. mining operation locations, Lu is less concerned.

The BitFuFu founder believes that U.S.-based miners can leverage the country's relatively low-cost and increasingly renewable energy sources to maintain competitive operating margins, even if upfront equipment costs modestly rise.

Singapore-based BitFuFu says it has built out local partnerships to optimize operations in states like Oklahoma, Texas, and Colorado — allowing it to absorb tariff impacts while expanding its U.S. presence, and other companies can do the same.

BitFuFu is currently the 13th largest public bitcoin miner by market cap, according to CompaniesMarketCap, valued at around $570 million, ranking between Bitfarms and HIVE Digital Technologies.

In a monthly bitcoin production update on Tuesday, BitFuFu said it mined 467 BTC in July, with self-mining up 43% month-over-month, and reached a record 38.6 EH/s hashrate and 752 MW power capacity. The company cited U.S. policy developments as a strong signal for the industry's future.

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