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With the tariff wind temporarily suspended, where is the US mining industry heading?
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After China banned cryptocurrency mining in 2021, the United States has become one of the largest cryptocurrency mining centers thanks to its relatively relaxed regulatory environment, abundant energy resources and advanced technological foundation. In the global Bitcoin mining landscape, the United States leads with a monthly hash share of 37.84%. However, after Trump announced the imposition of tariffs, the US Bitcoin mining industry may be mired in the quagmire of the trade war.
For the Bitcoin mining industry, hardware costs can account for 30% to 40% of total expenses. As the global cryptocurrency mining center, the United States has many large miners, but the mining industry's supply chain is rooted in Asia.
Tariffs will squeeze offshore supply of mining machines, which in turn will increase demand from U.S. miners. If this is combined with the rise in Bitcoin, ASIC mining machines may soar 5 to 10 times as in 2021. Against this backdrop, the stock prices of U.S. listed mining companies fell. The Bitcoin Mining Stock Index reached two troughs on April 4 and April 9. This index is calculated based on the comprehensive weighting of Bitcoin mining-related stocks of public mining equipment manufacturers, foundries and miners in the market today. This is consistent with the fact that after the tariff policy came into effect on April 9, the stock prices of U.S. listed Bitcoin mining companies, including MARA Holdings and CleanSpark Inc, all plummeted by about 10%.
U.S. bitcoin miners imported more than $2.3 billion worth of ASIC mining machines last year and more than $860 million in the first quarter, with Malaysia, Thailand and Indonesia being the main manufacturers of such machines. In the past few years, U.S.-listed mining companies have raised billions of dollars to build data centers in energy-rich regions such as Texas, and most of their mining equipment comes from China's largest bitcoin mining equipment manufacturer, Beijing Bitmain Technology Co., Ltd.
The company has factories in Indonesia, Malaysia and Thailand, which were among the countries subject to "tougher tariffs" before Trump announced a 90-day suspension of so-called "reciprocal tariffs" on most countries, charging only a 10% "minimum baseline tariff." But it's not just Bitmain. Southeast Asia is also where other major mining machine manufacturers such as Microbit and Canaan are based. Machine costs account for a high proportion of the capital expenditure of cryptocurrency miners. Regarding the consequences of the tariff increase policy, Lin, hardware director of Luxor Technology, said, "This means that their return on investment will be severely affected.
