As the U.S. stands at a critical moment in becoming a Bitcoin superpower, are American mining companies about to collapse?
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As the U.S. stands at a critical moment in becoming a Bitcoin superpower, are American mining companies about to collapse?
Trump's promise of making America a Bitcoin superpower now appears to be empty rhetoric, seemingly catering to nationalist sentiment rather than constituting genuine industrial policy.
Navigating Web3 tides with focused insightsBy: Joel, Khalili, Wired
Translated by: AididiaoJP, Foresight News
Trump's Bitcoin Mining Ambitions
Trump once promised to make the United States the global hub for Bitcoin mining. Yet his recent sweeping tariff policies have placed this ambition in a difficult dilemma.
President Donald Trump paused briefly, savoring the enthusiastic applause from the audience. At the cryptocurrency conference "Bitcoin 2024," before a crowd of fervent Bitcoin believers, he laid out his plan to transform the U.S. into a superpower of Bitcoin mining.
"I want Bitcoin mined, minted, and produced in America," he told the crowd. "You will be very happy with me—you'll be thrilled."
Since returning to the White House, Trump has largely delivered on his campaign promises: launching a national Bitcoin reserve, replacing leaders at regulatory agencies most hostile toward crypto firms under the previous administration, and appointing a "crypto czar" to establish clear industry regulations. However, when it comes to Bitcoin mining—one of the most critical areas—his actions so far have been contradictory. While supporting domestic miners, he simultaneously increased operational costs through tariffs.
The Dual Nature of Tariff Policy
On April 2, Trump announced punitive new tariffs on 57 countries, including a levy (later adjusted to 55%) on goods from China, and 24% to 36% tariffs on imports from Indonesia, Thailand, and Malaysia—countries where Chinese companies produce some mining equipment. This policy has left U.S. mining firms reliant on Chinese suppliers, including the newly formed Trump family-backed mining company American Bitcoin, facing surging hardware costs.
Yet these tariffs also offer a silver lining: they could boost small American manufacturers of mining hardware, since domestically produced machines are exempt from the new import duties.
Whether U.S. hardware makers can truly seize this opportunity depends heavily on whether American mining firms can withstand the economic shock caused by the tariffs.
To secure stable supply chains, mining companies typically sign long-term procurement agreements with hardware manufacturers. Now, these firms face a tricky problem: they may need to pay steep tariffs on Chinese-made mining rigs that have not yet been delivered.
Under pressure from rising costs, many U.S. mining firms have already started shifting their business focus toward artificial intelligence (AI) and other data center operations to pursue more stable profit streams. This trend puts the vision of a "Bitcoin superpower"—where U.S. companies mine Bitcoin using American-made hardware—at risk of stalling right at its inception.
"If things continue as they are, mining will keep getting pushed out of the U.S.," said Chris Bendiksen, head of Bitcoin research at investment firm CoinShares. "We may have already seen the peak of U.S. Bitcoin mining."
Kush Desai, a spokesperson for the White House, rejected claims that the tariffs might undermine Trump’s ambitions for Bitcoin mining in a statement to WIRED.
"Both things can happen at once," he said. "We can advance domestic hardware manufacturing through tariffs while also leveraging energy policy to reduce operating costs for Bitcoin miners."
The Hardware Arms Race of Bitcoin Mining
At its core, Bitcoin mining is a hardware arms race. Miners must constantly upgrade their equipment to ensure sufficient computing power to outcompete others and win the right to process transaction blocks and receive Bitcoin rewards.
In this field, two Chinese manufacturers—Bitmain and MicroBT—almost monopolize the global market. According to the Cambridge Centre for Alternative Finance (CCAF), a unit of Cambridge University, the two companies together control 97% of the mining hardware market share.
Although numerous challengers have attempted over the past few years to break this duopoly, none have succeeded in achieving breakthroughs in either hardware performance or production cost. "The road is littered with the bodies of failed competitors," commented Bendiksen.
The new tariff policy has forced many U.S. mining firms dependent on Chinese-made miners to reevaluate their supply chain strategies and seek alternatives.
Analysts believe Auradine, a Santa Clara-based mining hardware manufacturer, could be one of the biggest beneficiaries. For three years since its founding, the company struggled to challenge Bitmain and MicroBT’s dominance. But after Trump announced the new tariffs, inquiries from potential clients surged at Auradine.
"We’re seeing unprecedented market interest," said Rajiv Khemani, co-founder and CEO of Auradine. "Miners want to hedge against tariff risks under any policy environment."
To capitalize on this opportunity, Auradine recently launched a new line of Bitcoin mining products and raised $153 million in Series C funding. Khemani revealed the company is about to announce several high-profile customers who signed contracts after the tariff announcement.
MARA Holdings’ Strategy
One of Auradine’s star clients is MARA Holdings, a publicly traded U.S. mining company that not only helped found Auradine but also holds $85.4 million in equity in the firm.
Fred Thiel, CEO of MARA, said although Auradine’s machines currently make up only a small portion of its operating fleet, they account for about 50% of the company’s new orders for 2025.
"In an environment with both geopolitical and tariff risks, if U.S.-made miners are priced the same as those made in China, what would you choose? The answer is obvious," Thiel said. "Imagine if the U.S. government suddenly banned imports of Chinese mining equipment tomorrow, and you’ve already paid $300 million in deposits—your position would become extremely vulnerable."
However, whether Auradine can truly benefit from the tariff policy still hinges on whether U.S. mining firms can absorb the financial impact of tariffs on their existing orders.
The timing couldn’t be worse for miners. Even though rising Bitcoin prices have created some profit margin, intensified competition, declining transaction fees, and reduced block rewards have significantly squeezed profitability across the industry.
Meanwhile, mining firms are facing fierce competition from AI companies, which—with deep pockets—are vying for the U.S.’s limited energy resources. A recent forecast by the U.S. Department of Energy suggests that by 2028, AI-related electricity consumption could reach 22% of total residential electricity use nationwide.
U.S.-based Bitcoin mining companies—including Riot Platforms, Bitfarms, MARA, CoreWeave, Core Scientific, Hut 8, and Iris Energy—have increasingly pursued diversification, exiting mining altogether and repurposing their facilities for AI training and high-performance computing. Only a few large players, such as CleanSpark, remain focused primarily on Bitcoin mining.
"Miners have always been savvy buyers of electricity—they’ve been like vultures on the grid," Bendiksen remarked. "But now, AI companies are willing to pay higher electricity rates, further squeezing miners’ room to survive."
MARA’s CEO Thiel believes that tariff increases alone aren't enough to drive Bitcoin miners out of the U.S. Compared to energy costs, the impact of hardware import tariffs on overall operational expenses is relatively small.
Still, in an already challenging market environment, the cumulative effect of tariffs undoubtedly worsens the industry’s struggles.
"Typically, such shocks lead to industry consolidation," said Thiemo Fetzer, an economics professor at the University of Warwick. "We’re likely to see smaller miners eliminated, as rising equipment costs and supply chain uncertainty make survival even harder."
Global Expansion of Mining Firms
Facing challenges in the U.S. market, many mining firms are expanding overseas to mitigate tariff risks.
"Why are we developing international operations? Because it reduces exposure to single-policy risk," said one executive. "As Bitcoin miners, you must stay flexible."
Meanwhile, Chinese mining hardware giants Bitmain and MicroBT are accelerating plans for local production in the U.S. to bypass tariff barriers.
"We are actively investing in the U.S. market, including local manufacturing," said Irene Gao, president of Bitmain’s mining business.
Currently, most Bitcoin mining firms remain in a wait-and-see mode. With the final impact of Trump’s tariffs still unclear during the 90-day pause set to expire in July, many companies have delayed hardware purchasing decisions.
"Everyone is waiting to see how the tariff policy ultimately plays out," Khemani said.
The Contradictions in Trump’s Policies
On the surface, Trump’s tariff policy appears directly at odds with his ambition to grow the U.S. Bitcoin mining industry.
"These tariffs are clearly disruptive," Bendiksen stated bluntly.
To achieve both goals—supporting U.S. mining hardware manufacturers while ensuring mining firms can thrive in America—the Trump administration may need to deploy additional policy tools, such as advancing energy infrastructure projects to lower electricity costs for miners.
The White House claims recent executive orders will help reduce U.S. energy prices. But in reality, many mining firms are still scaling back domestic operations and pivoting toward AI or other sectors.
"Trump’s promise of 'Bitcoin Made in America' looks hollow right now," concluded Bendiksen. "It feels more like pandering to nationalist sentiment than a genuine industrial strategy."
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