Bitcoin Capital of the U.S.!
Who can claim that title?
Will one city or state be crowned the “Bitcoin Capital of America?” It’s a question worth asking, since Bitcoin the asset recently had a market cap of over a trillion dollars. Regulatory, demographic and geographic factors will all play a part in where the center of Bitcoin activities may ultimately be. This week I explore five locations in the US and discuss the attributes of each, plus some challenges they all may be facing. Though one city or state doesn’t necessarily have to emerge as the Bitcoin capital, I’ll give you my pick, too.
Miami
The Magic City recently hosted the Bitcoin Miami 2021 conference, drawing 15,000 Bitcoin enthusiasts from around the world. (See Issue no. 6!) Mayor Francis Suarez spoke at the event, proclaiming, “This is not a moment, this is a movement.” Suarez posted the Bitcoin whitepaper on the city website, lets employees be paid in Bitcoin, and accepts Bitcoin for tax payments. Clearly, he’s a supporter. But Miami has a lot more going for it.
Miami is one of the largest banking and financial centers in the US and is home to a large number of venture capitalists and high net-worth individuals, both needed for investing in tech companies. Another attractive feature of course is the fact that Florida has no state income tax. Signs of Bitcoin acceptance are popping up everywhere. The city hosts over 600 Bitcoin ATMs, and the crypto exchange FTX recently won the naming rights to the Miami Heat’s home arena, formerly American Airlines Arena.
The city is home to a large number of Latin American citizens. That, and the proximity to Latin America, bodes well for more Bitcoin adoption in Miami. With Latin American nations one by one adopting Bitcoin as legal tender, there will be a big push for widespread usage in Miami, especially for international remittances. Currently, the Florida Blockchain Business Association is lobbying the state legislature for easing of money transmission rules.
Texas
Texans do everything in a big way. No surprise, then, that the biggest crypto mining farm in North America is located in Texas. Whinstone, Inc.’s mining facility in Rockdale currently contains over 100,000 servers, and plans are in the works to double that capacity. The obvious reason for miners to set up shop in Texas is the abundance of cheap energy available in the Lone Star state. Plentiful oil and gas supplies, as well as a deregulated energy landscape in the state, make mining quite profitable.
But wait, didn’t Texas have huge problems with their electric grid earlier this year? Yep, for sure. And Whinstone and others miners shut down temporarily, appeasing state regulators. The electric grid even pays miners to shut down during times of peak usage. It’s a great crypto environment, and with the ban on mining in China, several companies are relocating to Texas. Bitmain, formerly in Beijing, moved in, and B.I.T. Mining is planning the move as well.
Oh, and the mayor of Rockdale, John King, just happens to mine Bitcoin at his home.
Wyoming
Senator Cynthia Lummis, elected in November, is probably the greatest Bitcoin proponent in Congress. She even recently donned the “Laser Eyes” in her Twitter photo, which as we know means “Laser Rays until 100K.” So, she’s a fan, and she brought the chair of Wyoming’s Blockchain Task Force to work with her in Washington.
Wyoming is a pretty affluent state, ranking 20th in the nation in per capita income, despite being home to only 577,000 residents. The state, like Florida, boasts no having no personal or corporate income taxes. And with the recent easing of the state’s money transmitter laws, it rivals Delaware as one of the best corporate domiciles in the country. Crypto exchange Kraken, based in California, recently opened offices in Wyoming, as did Ripple, a $10 billion enterprise.
New York City
The winner of last month’s mayoral primary, Eric Adams, is sure to be elected in November, and is determined to make the Big Apple the “Bitcoin Capital of the World.” (One of Adams’ opponents, Andrew Yang, is also a big Bitcoin proponent.) New York City certainly has a great start on being the country’s center of technology. They boast a large talent pool of highly educated tech workers. Other crypto enterprises, such as Grayscale, Chainalysis, and CoinDesk, already call New York Home. Google and Facebook also have a large presence in the city.
Adams will have his work cut out for him. A generally unfriendly business climate, high income taxes and tight restrictions over cryptocurrency activities will pose a challenge. The state also requires a special “Bitlicense” for any crypto enterprise. Adams is determined, however, to ease business regulations and to also improve quality of life issues in the city.
San Francisco
California has long been recognized as the tech capital of the country, going back to the early days of Silicon Valley in the 1970’s. Now home to Google, Facebook, Cisco, Intel and Oracle, the state also has the deep talent pool. California is home to crypto giants Coinbase, Kraken, Filecoin and Ambisafe, so they seem to have a jump on being a crypto hub. The state will have to overcome high tax rates, similar to New York, if it aims to be the tech capital of the nation.
The Outlook:
Miami, in my opinion, has most of the pieces in places to become the tech, and Bitcoin, capital of the country. Whether Miami or any US city can become an international crypto hub, however, will depend largely on the support of federal lawmakers. Recent signs point to less-than-friendly crypto regulations coming out of Washington. Perhaps Sen. Lummis and some of her colleagues can make a positive impact on coming crypto legislation.
Did You Know?
Ten years ago the price of one Bitcoin closed the year 2011 at $4.70. Like, one Starbucks coffee.
Tweet of the Week:
I posted a quote from economist Willy Woo on Sunday, showing his opinion of where the Bitcoin market stands now. It went relatively viral, with 810,000 impressions so far. I like Willy’s bullishness.
Issue No. 12, July 16, 2021
Rick Mulvey is a CPA, forensic accountant and crypto consultant. He writes about all things Bitcoin, runs marathons, yells at the Yankees and Giants, and is getting better at making homemade wine.
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