- The United States accounts for around 40% of the global Bitcoin hashrate.
- The Trump administration announced new “reciprocal tariffs” for several countries on 2 April.
- With this move, the cost of bringing mining rigs into the US could jump by more than 20%, making it infeasible to mine Bitcoin within the country.
The United States currently holds the lead in global Bitcoin mining. The country is responsible for around 36% of the world’s global hashrate. However, this lead is now at risk, thanks to the fresh wave of tariffs introduced by President Donald Trump.
These new import duties could massively raise the cost of mining equipment in the US and threaten its ability to compete in the global crypto mining arena. Let’s take a look at how these tariffs could affect the industry and why the ripple effects could last far longer than the policies themselves.
A Blow to Bitcoin Mining Economics
One of the issues at the center of this problem is cost. Bitcoin mining as an industry is heavily reliant on capital. More importantly, most of the equipment used in the industry is produced in Southeast Asia by major players like Bitmain, MicroBT, and Canaan.
While the US has been under a 25% tariff on Chinese mining imports for years, manufacturers have adapted to this by relocating to countries like Malaysia and Thailand, among others. However, this workaround is now off the table. The Trump administration announced new “reciprocal tariffs” targeting goods from these countries on 2 April.
This tariff wave raised import duties to 24% for Malaysia, 32% for Indonesia, and 36% for Thailand. With this move, the cost of bringing mining rigs into the US could jump by more than 20%.
According to Jaran Mellerud, CEO of Hashlabs Mining, in a recent report, a $1,000 mining rig could now cost around $1,240 in the US. Countries without many tariffs, like Finland, have this same machine’s cost at $1,000, and the resulting difference in cost could affect the margins of US-based mining firms. This is even more likely as Bitcoin’s mining difficulty continues to rise.
Decreased Demand And Falling Global Prices
By these estimates, these rising costs won’t just affect American miners. They might lead to even harsher shifts in global pricing instead. If the demand for mining rigs in the US collapses, manufacturers will be left with surplus inventory. To clear out this excess, they will likely slash prices in other regions and create a strange dynamic, indeed. Mining equipment prices will fall globally while rising in the US.
Non-US miners will realize this difference and seize the opportunity to move elsewhere. “It’s basic economics,” Mellerud says. “Lower demand in one region, combined with a need to sell stock leads to lower prices elsewhere.”
As the US becomes less attractive for mining operations, other countries are likely to pick up the slack. While US miners are unlikely to unplug their existing machines, they are also unlikely to buy new ones.
More Woes For The US?
The United States accounts for around 40% of the global Bitcoin hashrate. However, as operational costs rise and expansion slows down, this share could dwindle. According to Mellerud, we may see a more geographically diverse hashrate. Countries like Finland, Kazakhstan, and parts of South America will emerge and play larger roles.
Interestingly, while the short-term outlook for the US mining sector is grim, the long-term implications could be even more damaging. The slow expansion in the US could affect the overall growth of the global hashrate over the next couple of years. This said, miners in other regions will inevitably fill the gap.
