The decline in the control of hash rate by U.S. mining operations and the shift of the Bitcoin mining industry may be beneficial for the development of Bitcoin itself.
Written by: Deep Tide TechFlow
On April 2 at 4 PM Eastern Time, Trump signed an executive order to implement a comprehensive new reciprocal tariff policy, imposing at least a 10% tariff on all imported U.S. goods starting April 5, and higher tariffs on about 60 trading partners, including the EU and China, starting April 9.
This move triggered global market turmoil. After negotiating with several countries, Trump announced on April 9 that he would suspend these tariffs for 90 days but would raise tariffs on Chinese exports again to an astonishing 125%.
The erratic tariff policy has affected global stock market fluctuations, causing the cryptocurrency market to plummet. In addition, the tariffs have buried a cost storm for the U.S. Bitcoin mining industry.
On April 13, the U.S. CBP's official website released the latest "Guidelines for Exemptions from Reciprocal Tariffs on Specific Products," granting tariff exemptions for 20 product codes, but the chip models required for mainstream mining machines are not included in the specific CBP categories.
With the tariff storm temporarily halted, can the U.S. Bitcoin mining industry catch its breath, and where will it drift next?
"Tit for tat," U.S. mining companies are stuck in a quagmire
After China banned cryptocurrency mining in 2021, the U.S. has become one of the largest cryptocurrency mining centers, benefiting from a relatively relaxed regulatory environment, abundant energy resources, and advanced technological foundations.
In the global Bitcoin mining landscape, the U.S. leads with a hash share of 37.84% per month. However, after Trump announced the tariff increases, the U.S. Bitcoin mining industry may be deeply mired in the quagmire of a trade war.
For the Bitcoin mining industry, hardware costs can account for 30% to 40% of total expenses. As a global cryptocurrency mining center, the U.S. has concentrated many large miners, but the supply chain of the mining industry is rooted in Asia.
Chinese companies control 70% to 80% of the global ASIC hardware market. Pat Zhang, head of research at WOO X, stated that this means the high tariffs imposed by Trump on China will directly lead to a significant increase in equipment costs for U.S. mining companies.
Mitchell Askew, chief analyst at Blockware Solutions, pointed out that tariffs will compress offshore supply of mining machines, exacerbating demand for U.S. miners. If this coincides with a rise in Bitcoin prices, ASIC mining machines could surge 5 to 10 times as they did in 2021.
Against this backdrop, the stock prices of U.S. publicly listed mining companies have plummeted. The Bitcoin mining stock index experienced two troughs on April 4 and April 9, calculated based on the weighted average of Bitcoin mining-related stocks from public mining equipment manufacturers, foundries, and miners in today's market.
This is corroborated by the fact that after the tariff policy took effect on April 9, the stock prices of U.S. listed Bitcoin mining companies, including MARA Holdings and CleanSpark Inc, fell by about 10%.
Blockspace estimates that U.S. Bitcoin miners imported over $2.3 billion worth of ASIC mining machines last year, with imports exceeding $860 million in the first quarter, with Malaysia, Thailand, and Indonesia being the main manufacturers of such machines.
In recent years, U.S. publicly listed mining companies have raised billions of dollars to build data centers in energy-rich areas like Texas, with most of their mining equipment sourced from China's largest Bitcoin mining equipment manufacturer—Beijing Bitmain Technologies Co., Ltd.
The company has factories in Indonesia, Malaysia, and Thailand, and before Trump announced a 90-day suspension of the so-called "reciprocal tariffs" on most countries, these countries were among those subject to "stricter tariffs." But not only Bitmain, Southeast Asia is also home to other major mining machine manufacturers like MicroBT and Canaan.
The cost of machines accounts for a significant portion of capital expenditures for cryptocurrency miners. Regarding the consequences of the tariff policy, Lin, hardware director at Luxor Technology (a Bitcoin mining software and services company), stated, "This means their return on investment will be severely impacted." Meanwhile, the latest tariffs will "suppress the continued growth of the industry," said Taras Kulyk, CEO of Synteq Digital.
On April 12, the U.S. CBP's official website released the “Guidelines for Exemptions from Reciprocal Tariffs on Specific Products”, granting tariff exemptions for 20 product codes.
The U.S. classifies Bitcoin mining machines under category 8543 as electrical machinery and apparatus with independent functions not specified elsewhere, meaning that ASIC mining machines designed for Bitcoin mining do not meet the product categories in the "Guidelines for Exemptions from Reciprocal Tariffs on Specific Products," and the U.S. component rules also pose difficulties for U.S. crypto mining machine manufacturers. The 90-day suspension is merely a breathing space; the high tariffs still have the potential to reappear, so this article's estimates of mining machine costs still refer to the originally scheduled tax rates set to take effect on April 9.
Below is a comparison of some Bitmain mining machines under the tariff list published on April 2 in Top 10 Bitcoin Mining ASIC Machines for 2025 (China updated).
The imposition of tariffs has led to a staggering increase in machine costs. To avoid the price impact of U.S. tariffs on mining machines from China and Southeast Asian countries, Blockspace's report states that large U.S. mining companies are willing to rent planes at 2-4 times the usual price instead of using the more common and cheaper sea freight to import mining equipment from countries like China, Malaysia, and Thailand, spending $2 million to $3.5 million each time to evade potential price increases from tariffs.
This is almost a replay of the situation in May 2021 when Chinese mining machine manufacturers expedited the air freight of mining machines after China signaled a "crackdown on Bitcoin mining and trading activities."
Nick Hansen, CEO of Bitcoin mining company Luxor, stated in an interview: “Oh my, it’s chaos every day.”
To rush to get mining machines produced abroad into the U.S. before Trump's tariff policy took effect, both Kulyk and Lin said they were "frantically" accelerating the transport of these machines.
"Ideally, we could charter a plane to bring the machines over—just being as creative as possible to get the machines out." After the Trump administration announced a 90-day suspension on April 9, the cost pressure on U.S. Bitcoin mining companies eased, and stock prices gradually rebounded.
The tariff stick is raised high, seemingly gently lowered after causing chaos. But has this wind truly passed, or is it brewing a new storm?
Panic, shift?
Due to the significant cost impact of the aforementioned tariff policy on U.S. mining companies, on April 7, 2025, the hash price of Bitcoin (a measure of mining profitability) fell below $40/hour/TH, marking a new low since September 2024. Although the market showed some recovery after Trump announced a 90-day suspension on April 9, the hash price of Bitcoin remained hovering below $45/hour/TH, staying around $44/hour/TH for nearly four days, still at a low level since 2025.
Hansen stated, "Most miners think $40 is their bear market," and he has communicated with many mining companies, all of whom are "uncertain about what to do."
According to TheMinerMag, the $40 figure means that many miners' operating costs are at or below the breakeven point.
The total tariff cost of new machines imported from China rising to three digits has caused pain for U.S. miners, but it’s not just the tariffs; the price volatility of Bitcoin, decreasing fees, and consistently rising network difficulty will lead to "declining profitability, slowing growth of mining companies, and even potential consolidation, shutdowns, or a shift of hash rate from the U.S.," said Eli Nagar, CEO of Braiins, in an interview.
Hash cost measures the raw electricity cost (in dollars) required to generate corresponding revenue per TH/s or PH/s of computing power over 24 hours, calculated as: daily hash cost ($/PH/s) = power efficiency (J/TH) * electricity cost ($/kWh) * 24 (hours). Thus, under the premise of policy allowance, mining costs are influenced by two factors: the energy efficiency of the ASIC mining machines used and the electricity rates paid by users.
Since mining requires a large amount of electricity to operate and cool computers, energy costs have always been a key factor in mining profits. Affected by electricity prices, U.S. mining farms are mostly located in Texas, New York, Kentucky, and Georgia, with Texas being particularly prominent.
According to a report from the U.S. Energy Information Administration on July 18, 2024, Texas is a major energy-producing state, providing about a quarter of the nation's domestic primary energy. In addition to abundant oil, natural gas, and coal resources, Texas also has rich renewable energy resources, leading the nation in wind power generation. Compared to the 11.2% hash rate distribution among U.S. states reported by Cambridge in December 2021, Texas accounted for nearly 30% of the national hash rate in the updated data from Foundry USA in July 2023.
The increase in mining machine costs due to tariffs may hit small and medium-sized mining companies the hardest. A study by Investing shows that rising tariff rates will gradually lead to a decline in the U.S. share of the global Bitcoin hash rate. When tariffs exceed 25%, the U.S. share of the global Bitcoin hash rate could drop below 30%. As the tax rate increases, small and medium-sized mining companies will experience struggles to maintain operations, difficulties in profitability, and even exit the market, leading to further consolidation of hash rate among large mining operations in the U.S.
Source: Investing
Jaran Mellerud, CEO of Hashlabs Mining, believes that a reversal of tariffs by the Trump administration in the future will not restore confidence among U.S. cryptocurrency mining operators. "Even if these tariffs are lifted in a few months, the damage is done—long-term planning confidence has been shaken," Mellerud said. "When key variables can change overnight, few are willing to make significant investments." This may further guide domestic U.S. mining companies to shift towards energy-rich states (like Texas) or even other countries.
Additionally, as tariffs have increased the costs of importing ASIC mining machines and other mining equipment, existing facilities in the U.S. have become more valuable under the same conditions, and U.S. miners seeking expansion may turn their attention to acquisitions.
Kulyk predicts, "Suddenly, these mining machines with outdated equipment, which seem like zombie companies, actually present attractive acquisition opportunities."
In the long run, the U.S. Bitcoin mining industry is undergoing a reorganization, with a few large-scale companies likely to dominate the market. Looking internationally, the global landscape of Bitcoin mining may also quietly change.
A blessing in disguise
Focusing solely on U.S. mining, this storm is not just a blow; Hansen notes that there is a glimmer of hope amid the turmoil triggered by Trump—"the resilience of U.S. miners already deployed is strengthening."
U.S. mining companies are attempting to reduce their reliance on Chinese hardware by deploying ASIC manufacturing domestically to mitigate the potential re-emergence of high tariffs in the future.
For the development of Bitcoin itself, the decline in U.S. mining's control over hash rate and the shift of the Bitcoin mining industry may be beneficial.
Troy Cross, a professor of philosophy and humanities at Reed College, has stated that **if a country controls too much Bitcoin *hash power*, one of Bitcoin's core **value propositions—censorship resistance—is at risk.
Looking ahead, Cross believes that Bitcoin differs from other emerging technologies in that it will not benefit from a single country controlling most of the industry. Moreover, for the Bitcoin network, it is best for countries to control no more than 50% of the network. A high concentration of hash rate in a particular country or region will pose a greater risk of government control over Bitcoin, and the possibility of high tariffs will prompt U.S. mining companies to cede part of the international market, reshaping the global mining landscape.
In a report on April 8, Jaran Mellerud stated, "The excess inventory that manufacturers initially prepared for the U.S. market will pile up, and they may need to lower prices to attract buyers from other regions."
Ethan Vera, COO of Luxor, also stated, "If you are paying more for a machine than your competitors in Canada or Russia, you will find it hard to compete with international miners."
"From an economic perspective, Canada will actually become a more attractive place to do business. Corporate taxes are expected to decrease. Capital gains taxes will also be lowered. There is a strong push for economic growth in Canada, especially in the data center sector," while Kulyk also believes that the Nordic countries may become targets for expanding hash rate. In the future, miners may find opportunities for several gigawatts in parts of South America and Africa, Vera said.
The 90-day suspension period serves as both a buffer and a countdown. As the tax storm sweeps through, U.S. miners stand at a crossroads of choices. How many miners will grit their teeth and hold their ground domestically, and which mining companies are planning global migrations?
The specter of tariffs has not dissipated, hanging over U.S. miners like the sword of Damocles. The countdown of the exemption period ticks away, order changes in silence, and the torrent of hash power moves forward without looking back.
Reference Articles:
https://www.coindesk.com/tech/2025/04/10/how-bitcoin-miners-are-adjusting-to-trump-s-tariffs-blockspace
https://store.bitbo.io/blogs/mining/country
https://cn.cointelegraph.com/news/trumps-tariffs-lower-bitcoin-miner-price-outside-us
https://www.dlnews.com/articles/markets/trump-sons-launch-american-bitcoin-mining-with-hut-8/
https://www.newsbtc.com/news/bitcoin-mining-in-the-u-s-4-states-attract-the-most-miners/
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