Trump's commitment to making America a Bitcoin superpower currently seems to be mere rhetoric, more like pandering to nationalist sentiments rather than a genuine industrial policy.
Written by: Joel Khalili, Wired
Translated by: AididiaoJP, Foresight News
Trump's ambition for Bitcoin mining
Trump once promised to make America the global capital of Bitcoin mining. However, the recent comprehensive tariffs have put this ambition in a dilemma.
U.S. President Trump paused briefly, enjoying the enthusiastic applause from the audience. At the cryptocurrency conference 'Bitcoin 2024,' facing a crowd of fervent Bitcoin believers, he outlined his plan to make America a Bitcoin mining superpower.
'I want Bitcoin to be mined, minted, and produced in the U.S.,' he told the audience, 'You will be very pleased with me—you will be absolutely thrilled.'
Since returning to the White House, Trump has largely fulfilled his campaign promises: he has begun establishing a national Bitcoin reserve, replaced the head of the previous administration's most stringent regulator against crypto companies, and appointed a 'crypto czar' to set clear regulatory rules for the industry. However, in the key area of Bitcoin mining, the president's actions so far appear to be fraught with contradictions, as he supports domestic mining companies while simultaneously increasing the operational costs of the industry through tariff policies.
The dual nature of tariff policies
On April 2, Trump announced punitive new tariffs on 57 countries, including a tariff of 55% on goods from China and tariffs ranging from 24% to 36% on goods from Indonesia, Thailand, and Malaysia (where Chinese companies produce some mining machines). This policy has posed challenges for American mining companies reliant on Chinese suppliers, including Trump family’s newly established mining company 'American Bitcoin,' facing soaring hardware costs.
However, these tariffs also bring a glimmer of hope: they may support small domestic mining machine manufacturers, as American-made mining machines are not affected by the new import tariffs.
Whether American hardware manufacturers can truly seize this opportunity largely depends on their potential clients and whether American mining companies can withstand the economic impact of tariff policies.
To ensure supply chain stability, mining companies typically sign long-term procurement agreements with hardware manufacturers. Now, these companies face a tricky issue: they may need to pay high tariffs on Chinese mining machine orders that have not yet been delivered.
Faced with rising cost pressures, many American mining companies have begun to adjust their business directions, turning to artificial intelligence (AI) and other data center businesses in search of more stable sources of profit. This trend poses a risk of premature failure for the vision of a 'Bitcoin superpower,' where American companies mine using American-made mining machines on American soil.
'If things continue this way, the mining business will continue to be squeezed out of the U.S.,' said Chris Bendiksen, head of Bitcoin research at investment firm CoinShares. 'We may have already witnessed the peak of the U.S. mining industry.'
White House spokesperson Kush Desai dismissed claims that tariffs could undermine Trump's ambition for Bitcoin mining in a statement to WIRED magazine.
'Two things can be done simultaneously,' he said. 'We can promote the localization of hardware manufacturing through tariff policies, while also using energy policies to reduce the operating costs of Bitcoin mining companies.'
The arms race in Bitcoin mining hardware
Bitcoin mining is essentially an arms race in hardware. Mining companies must continuously upgrade their equipment to ensure their computing power is sufficient to defeat competitors, thereby winning the right to process transaction blocks and receive Bitcoin rewards.
In this field, two Chinese manufacturers, Bitmain and MicroBT, nearly monopolize the global market. The Cambridge Centre for Alternative Finance estimates that these two companies together control 97% of the mining machine market share.
Despite many challengers attempting to break this dual monopoly in recent years, none have made breakthroughs in hardware performance or production costs. 'This path is strewn with the corpses of failures,' Bendiksen commented.
The new tariff policies are forcing many American mining companies that rely on Chinese mining machines to reassess their supply chain strategies and seek alternatives.
Analysts believe that Santa Clara-based mining machine manufacturer Auradine may be one of the biggest beneficiaries. Since its establishment three years ago, the company has struggled to shake the market positions of Bitmain and MicroBT. However, since Trump announced the new tariffs, Auradine's customer inquiries have surged.
'We are seeing unprecedented market interest,' said Rajiv Khemani, co-founder and CEO of Auradine. 'Miners want to ensure they can hedge against tariff risks in any policy environment.'
To seize this opportunity, Auradine recently launched a new generation of Bitcoin mining machine product lines and raised $153 million in Series C financing. Khemani revealed that the company is about to announce a batch of high-profile customers signed after the tariff policy.
MARA Holdings' layout
One of Auradine's star customers is MARA Holdings, which not only participated in the founding of Auradine but also holds an equity stake of $85.4 million in the company.
MARA CEO Fred Thiel stated that although Auradine's mining machines currently account for only a small portion of the company's operational equipment, they have reached about 50% in new orders for 2025.
'In an environment with both geopolitical and tariff risks, if American-made mining machines are priced the same as Chinese-made ones, which would you choose? The answer is obvious,' Thiel said. 'If one day the U.S. government suddenly bans imports of Chinese mining machines, and you have already paid a $300 million deposit on an order, your situation will be extremely passive.'
However, whether Auradine can truly benefit from the tariff policies still depends on whether American mining companies can withstand the impact of tariffs on their existing orders.
The current timing is undoubtedly adding insult to injury for mining companies. Although the rise in Bitcoin prices has brought some profit margins, factors such as intensified industry competition, declining transaction fees, and reduced Bitcoin block rewards have significantly compressed the profit margins of mining companies.
At the same time, mining companies are facing fierce competition from AI companies, which, with ample funding, are vying for America's limited energy resources. The U.S. Department of Energy's latest forecast indicates that by 2028, the electricity consumption of the AI industry could reach 22% of the total household electricity usage in the U.S.
Bitcoin mining companies operating in the U.S., including Riot Platforms, Bitfarms, MARA, CoreWeave, Core Scientific, Hut 8, and Iris Energy, have all sought to diversify and exit the mining market, repurposing their facilities for AI training and high-performance computing. Only a few large companies, such as CleanSpark, are still focused on Bitcoin mining.
'Miners have always been savvy electricity buyers, they are like vultures on the power grid,' Bendiksen described. 'But now, AI companies are willing to pay higher electricity prices, further squeezing the survival space for mining companies.'
MARA's CEO Thiel believes that merely raising tariffs is not enough to force Bitcoin miners out of the U.S. Compared to energy costs, hardware import tariffs have a relatively small impact on the overall operating costs of mining companies.
However, in an already challenging market environment, the cumulative effects of tariff policies undoubtedly exacerbate the industry's predicament.
'Generally speaking, such shocks lead to industry consolidation,' said Thiemo Fetzer, an economics professor at the University of Warwick. 'We are likely to see small miners being eliminated as rising equipment costs and increasing supply chain uncertainty make their survival more difficult.'
Global layout of mining companies
Facing the challenges of the American market, many mining companies have begun to expand their businesses overseas to avoid tariff risks.
'Why do we want to develop international business? Because it can reduce the risk of a single policy,' he said. 'As a Bitcoin miner, you must remain flexible.'
At the same time, Chinese mining machine manufacturers Bitmain and MicroBT are also accelerating their layout for domestic 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, Bitcoin mining companies are generally in a wait-and-see mode. The ultimate impact of Trump's new tariffs remains unclear before the 90-day suspension period ends in July, leading many companies to postpone hardware procurement decisions.
'Everyone is waiting to see how the tariff policies will ultimately be implemented,' Khemani said.
The contradictions of Trump's policies
On the surface, Trump's tariff policy contradicts his ambition to promote the development of the American Bitcoin mining industry.
'These tariffs are clearly destructive,' Bendiksen bluntly commented.
To achieve two goals simultaneously: supporting American mining machine manufacturers while ensuring the survival of mining companies in the U.S., the Trump administration may need to employ other policy tools, such as promoting energy infrastructure development to lower the electricity costs for mining companies.
The White House claims that a recent series of executive orders will help reduce energy prices in the U.S. However, the reality is that many mining companies are still scaling back domestic operations and turning to AI or other fields.
'Trump's commitment to 'Bitcoin for all America' currently seems to be mere rhetoric,' Bendiksen summarized. 'This is more like pandering to nationalist sentiments rather than a real industrial policy.'
