Will tariffs end the golden age of bitcoin mining in America?

After China banned crypto in the summer of 2021, a huge chunk of the mining industry was forced to relocate — to Kazakhstan, Russia, Canada and other countries with cheap electricity. The biggest beneficiary of this exodus, however, was the United States, which over the last four years has overtaken every other country in the world in terms of hashrate (meaning that more bitcoin is produced in the U.S. than anywhere else).

Yet President Donald Trump’s tariff policies, unveiled on April 2 but paused for the time being, threaten to increase the costs of ASICs, the extremely powerful computers used to produce bitcoin. Only a handful of companies know how to build these ASICs, and the majority of their manufacturing facilities are located in Southeast Asia, in nations that face roughly 10% to 50% tariffs.

While the new taxes probably won’t make it prohibitively expensive for U.S.-based miners to import new machines, they will likely slow down the industry’s expansion in the country, multiple experts told CoinDesk.

“The U.S. is still going to be the major source of hashrate globally for the foreseeable future, but its overarching dominance will likely erode as bitcoin mining becomes a much more global business,” said Taras Kulyk, CEO of bitcoin hardware firm Synteq Digital.

“We’re certainly going to see U.S. hashrate plateau in terms of relative growth,” he added. “Other countries are coming into the space in a big way. Pakistan just announced it will dedicate two gigawatts of power to bitcoin mining. There are all sorts of projects happening in Ethiopia and abroad. They will certainly take up quite a bit of hashrate capacity growth.”

Tariffs are only a piece of a much larger puzzle. Other factors, such as the enormous demand for new data centers dedicated to artificial intelligence (AI) and the diminishing number of ideal U.S. locations for firms to set up mining facilities, are likely to have a larger impact on a miner’s calculations when it comes to choosing a jurisdiction in which to operate.

U.S.-based operations are still, in the short-term, able to tap into a robust secondary market in order to acquire mining rigs without paying tariffs. In the long-term, ASIC manufacturers are taking steps to produce their machines on U.S. soil.

The consensus seems to be that, far from destroying bitcoin mining in the U.S., tariffs are simply shaping up to be a new variable that the quick-moving, hyper-competitive industry has to contend with.

Biting the bullet

Tariffs mostly presented a challenge to miners in April because of how sudden and steep they were. Miners and logistics companies rushed to push ASIC shipments into the U.S. before the policy’s implementation in order to avoid paying substantial taxes — only for the White House to push the deadline back a few months.

Now, however, mining firms have adapted to the idea that imported ASICs will cost at least 10% more than they used to. But there is uncertainty as to whether this is the new normal. The Trump administration is still in the midst of trade negotiations, and the court system has yet to provide a definite ruling on the lawfulness of its new policies.

“It’s likely going to take a long time for us to have a definitive answer on what tariffs will look like — at least until the Supreme Court weighs in,” Lauren Lin, head of hardware at bitcoin hardware firm Luxor Technology, told CoinDesk in an interview. “We expect it to take a few months, even over a year.”

In the meantime, Luxor (which also runs a freight-forwarding business) isn’t seeing any signs of panic among its clients, though there has been an uptick in questions on how to prepare for Washington’s policy changes, according to Lin. Nor is the ASIC secondary market (where U.S.-based firms can acquire pre-owned, cheaper machines) slowing down, she said. In other words, miners are plodding along.

But there are new difficulties, like the fact that tariffs also impact imported electrical hardware. Transformers, for example, are mostly manufactured overseas and were already difficult to obtain before April. Tariffs have only worsened the situation. This has been a bigger source of frustration for miners than tariffs on ASICs, according to an individual who works for a crypto trade organization.

Overall, the White House’s initial tariffs on Southeast Asian nations should only be seen as a starting point for a policy that will likely evolve over time, Jeff LaBerge, head of capital markets and strategic initiatives at bitcoin miner Bitdeer, told CoinDesk in an interview. “We’re pretty optimistic that there’ll be a reasonable outcome at the end of this,” he said.

Made in America

The $30 billion ASIC market is dominated by Bitmain, a Chinese firm whose machines power roughly 80% of Bitcoin’s hashrate, according to TheMinerMag. Its competitors include MicroBT, Canaan and Bitdeer.

These companies manufacture the vast majority of their ASICs in Malaysia, Thailand and China, though MicroBT already has at least one facility in Pennsylvania, and Bitmain announced in December that it was launching a new production line in the United States. Canaan has also completed a U.S. trial run, meaning that it now has the capacity to build ASICs in the country if it chooses to.

The Trump administration’s tariffs are accomplishing one of their stated objectives (to boost U.S. industry) in that they’re incentivizing these ASIC manufacturers to scale up their operations in the country.

Canaan told CoinDesk that, while production in the U.S. is costly, it brings the advantages of being geographically closer to their customers and of reducing supply chain risks. The firm said that it is currently exploring the possibility of partnering with existing U.S.-based manufacturers for its own purposes. MicroBT is also looking into ways to avoid tariffs by ramping up U.S. production.

Bitdeer, a new but technologically advanced player in the ASIC scene, is looking at the situation as an opportunity to seize market share from the incumbents. “We’d like to migrate as much as we can to the U.S.,” LaBerge said. “It will take some time to ramp that up.”

“Being a manufacturer and a miner gives us tremendous optionality, because we’ll always have a home for the rigs that we produce, whether it’s in our own data centers or with a third party,” he added. Bitdeer has mining operations in Texas and Ohio, among other locations.

The heavyweight, Bitmain, has not communicated new plans to ramp up U.S. production since tariffs were announced in April. But the company will likely want to demonstrate that it’s building in the U.S. in accordance with the Trump administration’s goals, Synteq’s Kulyk said. Bitmain did not respond to a request for comment.

In any case, the consensus seems to be that expanding production capacity in the U.S. will be a slow and costly process.

“Whether we scale our machine manufacturing in the U.S. depends on our ability to cut costs as well as demand from our U.S. customers. If demand from U.S. customers is low, manufacturing here doesn’t make sense,” Canaan told CoinDesk. “In addition, if tariffs on products from Southeast Asia [end up being] low, then we don’t necessarily need to build up our manufacturing capabilities in the United States.”

The end of a golden age?

So miners are quickly adapting to the new reality of tariffs, and ASIC manufacturers look ready to ramp up local production. Nevertheless, Bitcoin’s U.S.-based hashrate (currently worth over 40% of global hashrate) is unlikely to keep growing as fast as it has in the last four years.

For one thing, tariffs do have an impact. Bitcoin mining is a highly competitive industry, and companies are always looking for ways to cut costs. If the choice is between opening a new mining facility in Texas or in Ontario, tariffs may swing the decision in favour of the latter.

More important, however, is the fact that it’s getting harder to find new U.S. locations that meet the necessary requirements for spinning up new bitcoin mining operations. “Most of the low-hanging fruit has been picked in the U.S.,” LaBerge said.

Not to mention that competition has become more intense. Data centers dedicated to high-performance computing (HPC) are popping up all over the country in order to scale AI capabilities, and the industry’s major players — Microsoft, Meta, Google — are deep-pocketed. If a site is suitable for both mining and HPC, the miners are unlikely to win a bidding war.

Nor would they necessarily want to. HPC data centers are more complex and capital intensive to build, but they also bring in much higher profits; this has led a number of bitcoin mining firms to diversify into AI.

“HPC chasing electrons is the main theme for the next two to 10 years,” Kulyk told CoinDesk. “Bitcoin miners most certainly have targets on their backs for acquisition and consolidation in the space… As a sector, they will likely get eaten or absorbed into overall digital compute.”

This phenomenon is likely to stay contained to the U.S. because of the technical sophistication required to build and run HPC centers. Political considerations also play a big part, considering the ongoing AI arms race between the U.S. and China. In other words, bitcoin miners outside of the U.S. won’t be impacted by the rapid growth of the HPC industry the same way.

For U.S.-based miners, the path forward may no longer be expanding in terms of megawatts, but in terms of efficiency, according to LaBerge.

“If you look at the global hashrate right now… the majority of rigs have an efficiency of 30 joules per terahash (J/TH) or higher,” he said. For comparison, Bitmain and Bitdeer’s latest generation machines are closer to 10 J/TH in efficiency. “In today’s economics, that’s marginally profitable at best.”

“All of those rigs need to be refreshed,” he continued. “We see this as a $4-6 billion a year addressable market for the next three to five years.”

CORRECTION (June 24, 2025, 16:30 UTC): Canaan isn’t looking into building its own U.S.-based manufacturing facilities, as previously stated by the article, but is mulling the idea of partnering with existing U.S. manufacturers.