Author: Steven Ehrlich Source: unchainedcrypto Translator: Shan Ouba, Golden Finance
As a journalist who has tracked Bitcoin miners for many years, I have witnessed their ups and downs. For a long time, their stocks were the only way for investors to get exposed to Bitcoin without directly holding Bitcoin assets. However, in recent years, they have faced new competitors for investor funds, as well as a more challenging operating environment.
Today, they may face unprecedented challenges - a tariff of up to 36% on new mining machines, which could completely destroy their ability to remain profitable.
Can they get relief from the Trump administration?
Bitcoin miners, the unsung heroes of this industry, have become collateral damage in Donald Trump's trade war. President Donald Trump stated in his 2024 campaign that he wants all remaining Bitcoins, about 1.15 million of the original supply of 21 million, to be mined in the United States. While this promise is both unrealistic and contrary to the decentralized spirit of Bitcoin, the message is clear: the U.S. will fully commit to Bitcoin mining.
Fast forward to April 2025, this promise seems utterly ridiculous. The troubled industry has suffered greatly due to the Trump administration's unprecedented so-called "reciprocal tariff" policy imposed on nearly all U.S. trading partners.
Nowadays, miners importing hundreds of millions of dollars worth of mining machines from countries like Vietnam, Thailand, and Malaysia are facing tariffs of 24-46%.
And this news couldn't be worse. The "hash price" (a term used to evaluate mining profitability, which refers to the amount of Bitcoin earned per unit of energy) continues to hit historic lows due to increased competition, and with the global macroeconomic downturn, Bitcoin prices are sluggish, causing new Bitcoin earnings to stagnate. As of the time of writing, the price of Bitcoin is $84,536, down 22% from its historic high of over $108,786 in January 2025.
These circumstances have put American miners in a difficult position. (According to multiple sources, they account for about 40% of the global total hash rate or mining capacity on the Bitcoin network.) Should they import machines and pay high tariffs to maintain parity with the global network's hash rate, or let these machines sit idle in warehouses in Asia?
"I see everyone, even high-level people, feeling very confused. No one really knows what is happening," said Taras Kulyk, CEO of Synteq Digital, the official distributor of Bitmain, the world's largest Bitcoin mining machine manufacturer. "No one really understands—without better words—what the 'strategy' being implemented right now is. It seems to be chaos, not even controlled or organized chaos. It is no longer 5D chess. It just looks like complete, ridiculous chaos."
Recent Wounds of Miners
If there is still a glimmer of hope for Bitcoin miners, it is that the numerous challenges they have overcome in recent years have strengthened their resilience. After the Chinese government expelled all miners in May 2021, resulting in a 42% drop in hash rate, Bitcoin miners faced a series of challenges.
First, there is a series of Bitcoin proxy alternatives that suddenly become competitors for investor funds. Strategy (formerly MicroStrategy) was the first to propose adopting a Bitcoin accumulation strategy as a corporate creed in 2020, becoming a spiritual symbol of the Bitcoin industry. The company currently holds 528,185 Bitcoins, worth $44.8 billion, with an unrealized gain of $9 billion. Its stock has more than quadrupled in 2024.
A series of imitation companies such as Semler Scientific, Metaplanet, and Genius Group have followed suit. They are able to fund these purchases through "issuing shares at market prices" or "zero-coupon convertible bonds," which means investors lend billions of dollars to these companies at zero interest rates so that they can buy bitcoin now. This strategy is in stark contrast to Bitcoin miners, who have to pay huge upfront costs to purchase mining rigs, power generation, facilities, and bear various overheads. All with the aim of reaping the rewards in the next 12-24 months.
To make matters worse, many miners had to sell newly mined Bitcoin and Bitcoin on their balance sheets during the bear market in 2022 and early 2023 to stay afloat. This meant they could not benefit from the surge in Bitcoin breaking the $100,000 mark.
The second blow comes from the launch of a spot Bitcoin ETF in January 2024, led by companies like BlackRock and Fidelity, which have accumulated over $100 billion in Bitcoin themselves. All of this means that publicly traded Bitcoin mining stocks, which have operated in an oligopolistic manner for years, suddenly face competition from investors looking to gain exposure to Bitcoin, whether through leverage or high beta.
The Crossroads of Miners
Then came the boom in artificial intelligence or high-performance computing (HPC) over the past two years. Miners suddenly faced another critical decision—should they focus on mining or pivot to this hot industry? This choice is not as simple as it sounds, as the servers required for mining Bitcoin are entirely different from those needed to run large language models (LLMs) like ChatGPT. However, hosting sites can serve dual purposes. Many companies have extended olive branches to the HPC industry, but at least for now, many of them are just marketing gimmicks. The only Bitcoin miner that has generated significant revenue from servicing HPC clients is Core Scientific.
Shifting to HPC may boost stock prices in the short term, but it also means that miners miss out on future profits from mining Bitcoin. This also puts them at risk of a dramatic reversal of fortune when Chinese competitor DeepSeek shocks the entire market with its low-cost LLM competitors.
All these uncertainties, combined with the recent market crash, have led to Bitcoin miners being penalized by investors this year. Many top miners have experienced a market value loss of over 50% by 2025.
Hold Your Breath
When talking to multiple miners, many of them were focused on improving operational efficiency and putting off major decisions until tariffs became clearer. Their slogan is to control what they can control. The good news is that even if it sometimes means incurring additional costs to maintain hashrate growth expectations, most major miners can afford to get through the coming months and wait and see what happens when Trump's 90-day reciprocal tariff moratorium expires on July 9.
Lauren Lim, the hardware director of ASIC broker Luxor Technologies, stated in an interview that most miners are happy to pay a unified tariff of 10% on orders imported from Southeast Asia. "We see that miners are directly bearing the 10% cost. Initially, they had already paid about 3% in tariffs in Malaysia (for example), so paying an additional 7% is still relatively bearable."
But costs are not limited to tariffs. Before the deadline of July 9, any goods imported into the United States faced a rush, causing transportation costs to skyrocket. "I know that some of our biggest partners suffered huge losses trying to import hardware before the April 9 deadline (the date when the reciprocal tariffs were supposed to take effect)," Kulyk said. "They spent tens of millions of dollars on this, only to see Trump grant an extension and provide exemptions for all goods."
Mining analyst Wolfie Zhao said in an interview that "for most Tier 1 miners such as Riot, CleanSpark and Iris Energy, the impact appears to be limited." These companies either paused hashrate expansion or received major shipments ahead of schedule. Not everyone is so lucky, he said. However, other companies such as Cipher Mining and Hut 8 may be at greater risk. Cipher has a pending shipment of Q2 Bitmain S21 XP series cargo, while Hut 8 has disclosed multiple Bitmain purchase agreements since late 2024 that may still be fulfilled. ”
Zhao also pointed out that at today's price (which is still up 37% from the past 12 months), miners are still profitably producing Bitcoin and are not forced to liquidate more assets to repay debts or face the danger of massively subsidizing operations. "Overall, we do not see signs of significant distress. The current price of Bitcoin is still well above the level that would force balance sheets to be generally strained, and most miners have learned lessons from the 2021 cycle and are no longer over-leveraged."
However, miners are adjusting their strategies to avoid being completely subject to Trump's tariff whims. Miners with remaining capacity globally are planning to relocate machines to these locations to avoid U.S. tariffs. "In the third and fourth quarters of last year, we moved many machines from our U.S. sites to Ethiopia due to the significant cost differences," said Charley Brady, Vice President of Investor Relations at the publicly listed Bitcoin miner Bitfufu. Brady stated that looking ahead, the company will prioritize overseas expansion, such as further entering Ethiopia to take over existing sites or build new ones while exploring opportunities in the U.S.
In an interview with Unchained, Jeff LeBerge, Bitdeer's head of capital markets and strategic initiatives, was more explicit: "We have capacity in Texas that we're looking to fill, but we also have capacity in Norway and Bhutan, and that's where most of our new capacity comes online this year." As a result, we were able to move some mining rigs out of Texas. Now we will prioritize Norway and Bhutan until we have a clearer picture of the tariff situation. ”
Uncle Sam may fail to deliver on promises
But it's clear that any idea of expecting U.S. bitcoin miners to become less dependent on foreign manufacturing, such as the two exceptions mentioned above, is likely to be misplaced. MicroBT, another of the Chinese mining machine duopoly, has been producing mining rigs in the United States for about three years. But it can only produce about 5000 units per month in the United States. Bitmain has three factories in the United States, and the publicly listed Canaan also produces some mining machines in the United States. Luxor's Lim estimates that the three companies can collectively produce up to 15,000 units per month in the United States. There are also smaller but growing domestic manufacturers, such as Bitdeer and Auradine, that are ramping up production.
But Lim stated that all of this adds up to less than 10% of global monthly production. Moreover, the situation becomes more complicated because rapidly increasing production may be much more difficult than it sounds.
She said, "I actually do not expect domestic production in the U.S. to increase significantly, because the production costs here are very high. Moreover, the production speed is not as fast as that of non-U.S. factories." Lim also pointed out that these companies might find it difficult to sell the equipment they have already produced domestically, as the types of equipment these factories can produce may not necessarily match what miners want to order.
"Cicada Effect" or Exception Clause?
All of this means that sometime this summer, especially if the reciprocal tariffs are not further postponed, these companies will have to make some key decisions.
More simply, given this regulatory uncertainty, they need to decide if the U.S. is a safe place to make a nine-figure investment. And this trend may not be immediately apparent. "The committed capital of existing projects (in the United States) that have already broken ground will not stop," Kulyk said. "These projects are going to be developed and you might see growth in the next six to nine months, twelve months, eighteen months. The real chilling effect will be on new projects that are breaking ground, allocating new development and capacity. ”
A potential mitigating factor may be that the Trump family is now directly involved in the Bitcoin mining business by establishing a new company called American Bitcoin in partnership with another company, Hut8. Even with close ties to the government, the company cannot avoid the economic costs brought by these tariffs, which may lead to the industry obtaining special exemption clauses.
The content is for reference only, not a solicitation or offer. No investment, tax, or legal advice provided. See Disclaimer for more risks disclosure.
How will Trump's tariffs affect American Bitcoin miners
Author: Steven Ehrlich Source: unchainedcrypto Translator: Shan Ouba, Golden Finance
As a journalist who has tracked Bitcoin miners for many years, I have witnessed their ups and downs. For a long time, their stocks were the only way for investors to get exposed to Bitcoin without directly holding Bitcoin assets. However, in recent years, they have faced new competitors for investor funds, as well as a more challenging operating environment.
Today, they may face unprecedented challenges - a tariff of up to 36% on new mining machines, which could completely destroy their ability to remain profitable.
Can they get relief from the Trump administration?
Bitcoin miners, the unsung heroes of this industry, have become collateral damage in Donald Trump's trade war. President Donald Trump stated in his 2024 campaign that he wants all remaining Bitcoins, about 1.15 million of the original supply of 21 million, to be mined in the United States. While this promise is both unrealistic and contrary to the decentralized spirit of Bitcoin, the message is clear: the U.S. will fully commit to Bitcoin mining.
Fast forward to April 2025, this promise seems utterly ridiculous. The troubled industry has suffered greatly due to the Trump administration's unprecedented so-called "reciprocal tariff" policy imposed on nearly all U.S. trading partners.
Nowadays, miners importing hundreds of millions of dollars worth of mining machines from countries like Vietnam, Thailand, and Malaysia are facing tariffs of 24-46%.
And this news couldn't be worse. The "hash price" (a term used to evaluate mining profitability, which refers to the amount of Bitcoin earned per unit of energy) continues to hit historic lows due to increased competition, and with the global macroeconomic downturn, Bitcoin prices are sluggish, causing new Bitcoin earnings to stagnate. As of the time of writing, the price of Bitcoin is $84,536, down 22% from its historic high of over $108,786 in January 2025.
These circumstances have put American miners in a difficult position. (According to multiple sources, they account for about 40% of the global total hash rate or mining capacity on the Bitcoin network.) Should they import machines and pay high tariffs to maintain parity with the global network's hash rate, or let these machines sit idle in warehouses in Asia?
"I see everyone, even high-level people, feeling very confused. No one really knows what is happening," said Taras Kulyk, CEO of Synteq Digital, the official distributor of Bitmain, the world's largest Bitcoin mining machine manufacturer. "No one really understands—without better words—what the 'strategy' being implemented right now is. It seems to be chaos, not even controlled or organized chaos. It is no longer 5D chess. It just looks like complete, ridiculous chaos."
Recent Wounds of Miners
If there is still a glimmer of hope for Bitcoin miners, it is that the numerous challenges they have overcome in recent years have strengthened their resilience. After the Chinese government expelled all miners in May 2021, resulting in a 42% drop in hash rate, Bitcoin miners faced a series of challenges.
First, there is a series of Bitcoin proxy alternatives that suddenly become competitors for investor funds. Strategy (formerly MicroStrategy) was the first to propose adopting a Bitcoin accumulation strategy as a corporate creed in 2020, becoming a spiritual symbol of the Bitcoin industry. The company currently holds 528,185 Bitcoins, worth $44.8 billion, with an unrealized gain of $9 billion. Its stock has more than quadrupled in 2024.
A series of imitation companies such as Semler Scientific, Metaplanet, and Genius Group have followed suit. They are able to fund these purchases through "issuing shares at market prices" or "zero-coupon convertible bonds," which means investors lend billions of dollars to these companies at zero interest rates so that they can buy bitcoin now. This strategy is in stark contrast to Bitcoin miners, who have to pay huge upfront costs to purchase mining rigs, power generation, facilities, and bear various overheads. All with the aim of reaping the rewards in the next 12-24 months.
To make matters worse, many miners had to sell newly mined Bitcoin and Bitcoin on their balance sheets during the bear market in 2022 and early 2023 to stay afloat. This meant they could not benefit from the surge in Bitcoin breaking the $100,000 mark.
The second blow comes from the launch of a spot Bitcoin ETF in January 2024, led by companies like BlackRock and Fidelity, which have accumulated over $100 billion in Bitcoin themselves. All of this means that publicly traded Bitcoin mining stocks, which have operated in an oligopolistic manner for years, suddenly face competition from investors looking to gain exposure to Bitcoin, whether through leverage or high beta.
The Crossroads of Miners
Then came the boom in artificial intelligence or high-performance computing (HPC) over the past two years. Miners suddenly faced another critical decision—should they focus on mining or pivot to this hot industry? This choice is not as simple as it sounds, as the servers required for mining Bitcoin are entirely different from those needed to run large language models (LLMs) like ChatGPT. However, hosting sites can serve dual purposes. Many companies have extended olive branches to the HPC industry, but at least for now, many of them are just marketing gimmicks. The only Bitcoin miner that has generated significant revenue from servicing HPC clients is Core Scientific.
Shifting to HPC may boost stock prices in the short term, but it also means that miners miss out on future profits from mining Bitcoin. This also puts them at risk of a dramatic reversal of fortune when Chinese competitor DeepSeek shocks the entire market with its low-cost LLM competitors.
All these uncertainties, combined with the recent market crash, have led to Bitcoin miners being penalized by investors this year. Many top miners have experienced a market value loss of over 50% by 2025.
Hold Your Breath
When talking to multiple miners, many of them were focused on improving operational efficiency and putting off major decisions until tariffs became clearer. Their slogan is to control what they can control. The good news is that even if it sometimes means incurring additional costs to maintain hashrate growth expectations, most major miners can afford to get through the coming months and wait and see what happens when Trump's 90-day reciprocal tariff moratorium expires on July 9.
Lauren Lim, the hardware director of ASIC broker Luxor Technologies, stated in an interview that most miners are happy to pay a unified tariff of 10% on orders imported from Southeast Asia. "We see that miners are directly bearing the 10% cost. Initially, they had already paid about 3% in tariffs in Malaysia (for example), so paying an additional 7% is still relatively bearable."
But costs are not limited to tariffs. Before the deadline of July 9, any goods imported into the United States faced a rush, causing transportation costs to skyrocket. "I know that some of our biggest partners suffered huge losses trying to import hardware before the April 9 deadline (the date when the reciprocal tariffs were supposed to take effect)," Kulyk said. "They spent tens of millions of dollars on this, only to see Trump grant an extension and provide exemptions for all goods."
Mining analyst Wolfie Zhao said in an interview that "for most Tier 1 miners such as Riot, CleanSpark and Iris Energy, the impact appears to be limited." These companies either paused hashrate expansion or received major shipments ahead of schedule. Not everyone is so lucky, he said. However, other companies such as Cipher Mining and Hut 8 may be at greater risk. Cipher has a pending shipment of Q2 Bitmain S21 XP series cargo, while Hut 8 has disclosed multiple Bitmain purchase agreements since late 2024 that may still be fulfilled. ”
Zhao also pointed out that at today's price (which is still up 37% from the past 12 months), miners are still profitably producing Bitcoin and are not forced to liquidate more assets to repay debts or face the danger of massively subsidizing operations. "Overall, we do not see signs of significant distress. The current price of Bitcoin is still well above the level that would force balance sheets to be generally strained, and most miners have learned lessons from the 2021 cycle and are no longer over-leveraged."
However, miners are adjusting their strategies to avoid being completely subject to Trump's tariff whims. Miners with remaining capacity globally are planning to relocate machines to these locations to avoid U.S. tariffs. "In the third and fourth quarters of last year, we moved many machines from our U.S. sites to Ethiopia due to the significant cost differences," said Charley Brady, Vice President of Investor Relations at the publicly listed Bitcoin miner Bitfufu. Brady stated that looking ahead, the company will prioritize overseas expansion, such as further entering Ethiopia to take over existing sites or build new ones while exploring opportunities in the U.S.
In an interview with Unchained, Jeff LeBerge, Bitdeer's head of capital markets and strategic initiatives, was more explicit: "We have capacity in Texas that we're looking to fill, but we also have capacity in Norway and Bhutan, and that's where most of our new capacity comes online this year." As a result, we were able to move some mining rigs out of Texas. Now we will prioritize Norway and Bhutan until we have a clearer picture of the tariff situation. ”
Uncle Sam may fail to deliver on promises
But it's clear that any idea of expecting U.S. bitcoin miners to become less dependent on foreign manufacturing, such as the two exceptions mentioned above, is likely to be misplaced. MicroBT, another of the Chinese mining machine duopoly, has been producing mining rigs in the United States for about three years. But it can only produce about 5000 units per month in the United States. Bitmain has three factories in the United States, and the publicly listed Canaan also produces some mining machines in the United States. Luxor's Lim estimates that the three companies can collectively produce up to 15,000 units per month in the United States. There are also smaller but growing domestic manufacturers, such as Bitdeer and Auradine, that are ramping up production.
But Lim stated that all of this adds up to less than 10% of global monthly production. Moreover, the situation becomes more complicated because rapidly increasing production may be much more difficult than it sounds.
She said, "I actually do not expect domestic production in the U.S. to increase significantly, because the production costs here are very high. Moreover, the production speed is not as fast as that of non-U.S. factories." Lim also pointed out that these companies might find it difficult to sell the equipment they have already produced domestically, as the types of equipment these factories can produce may not necessarily match what miners want to order.
"Cicada Effect" or Exception Clause?
All of this means that sometime this summer, especially if the reciprocal tariffs are not further postponed, these companies will have to make some key decisions.
More simply, given this regulatory uncertainty, they need to decide if the U.S. is a safe place to make a nine-figure investment. And this trend may not be immediately apparent. "The committed capital of existing projects (in the United States) that have already broken ground will not stop," Kulyk said. "These projects are going to be developed and you might see growth in the next six to nine months, twelve months, eighteen months. The real chilling effect will be on new projects that are breaking ground, allocating new development and capacity. ”
A potential mitigating factor may be that the Trump family is now directly involved in the Bitcoin mining business by establishing a new company called American Bitcoin in partnership with another company, Hut8. Even with close ties to the government, the company cannot avoid the economic costs brought by these tariffs, which may lead to the industry obtaining special exemption clauses.