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Bitcoin Mining Takes a Hit as US Tariffs Drive Up Costs

US tariffs drive up Bitcoin mining costs, causing hashrate decline. Bitdeer shifts to self-mining and US production to offset rising expenses.

Bitcoin mining, once a booming sector in the United States, is facing significant headwinds as escalating trade tensions and newly imposed tariffs disrupt the global supply chain. With the cost of importing mining equipment rising sharply, the industry is experiencing a noticeable decline in hashrate — a key indicator of mining activity and network security. Companies like Bitdeer are responding by reshaping their operational models, signaling a potential shift in the mining ecosystem.

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Tariffs Disrupt the Mining Supply Chain

The recent imposition of tariffs by the U.S. government, part of a broader escalation in trade tensions with China and Southeast Asia, has particularly impacted Bitcoin miners. Mining hardware, most of which is manufactured in China, now faces higher import duties, increasing the total cost of mining operations in the U.S.

President Donald Trump’s announcement of a temporary 90-day pause on certain tariffs provided only a brief window of relief. During this time, companies scrambled to import as much equipment as possible before the full effect of the tariffs resumed. This rush led to inflated shipping and hardware costs, further tightening profit margins for U.S.-based miners.

Bitcoin Hashrate on the Decline

One of the most immediate consequences of these rising costs is a drop in Bitcoin’s hashrate — the total computational power used to mine and secure the network. According to data from the Hashrate Index, the hashrate fell over the past month, suggesting that some miners are powering down their rigs due to diminishing returns.

This decline in hashrate not only impacts network security but also serves as a proxy for mining profitability. The “hash price” — a metric that measures the revenue miners earn per unit of hashrate — has reached near-record lows, making it financially unfeasible for many miners to continue operations.

Bitdeer's Strategic Pivot to Self-Mining

Amid this industry turmoil, Bitdeer Technologies, a major player in the crypto mining hardware space, is taking a bold step. Rather than relying solely on hardware sales, the company is pivoting toward self-mining — using its own machines to mine Bitcoin rather than selling them to third parties.

“We’re prioritizing our own self-mining operations,” said Jeff LaBerge, Bitdeer’s head of capital markets and strategic initiatives. The move comes as hardware demand softens and geopolitical instability threatens long-term supply chain reliability.

Bitdeer also plans to begin manufacturing mining equipment within the U.S. to reduce dependence on overseas production. This local manufacturing strategy could offer greater control over costs and lessen the impact of future tariff fluctuations.

Regulatory Clarity Provides a Silver Lining

In a bit of good news for miners, the U.S. Securities and Exchange Commission (SEC) recently clarified that proof-of-work mining is not considered a securities offering. This statement removes a layer of legal uncertainty for mining companies, many of which had been concerned about potential registration requirements under federal securities laws.

While this clarification won’t offset the rising hardware costs, it does at least provide a clearer regulatory path for those still operating or looking to enter the mining space.

Broader Industry Implications

The situation highlights a growing divide in the mining sector: those with capital and integrated supply chains, like Bitdeer and Marathon Digital, are better positioned to weather the storm, while smaller operations may be forced to shut down or relocate.

The current challenges may accelerate consolidation in the industry, favoring large firms with global logistics capabilities and diversified infrastructure. Additionally, U.S.-based manufacturing of mining rigs — if successful — could mark the beginning of a new era of localized production that buffers the sector from geopolitical risk.

Conclusion

Bitcoin mining in the U.S. is undergoing a major stress test. As tariffs inflate equipment costs and force a rethinking of traditional business models, the industry is bracing for a shake-up. For companies like Bitdeer, adapting quickly through self-mining and domestic production may offer a lifeline — and perhaps a competitive edge — in an increasingly volatile environment.

If the current trajectory continues, the landscape of Bitcoin mining may look very different in the next few years, with fewer but more powerful players dominating the scene.

FAQs

Why is Bitcoin mining becoming more expensive in the US?

Bitcoin mining is becoming more costly in the US due to newly imposed tariffs on imported mining equipment, primarily manufactured in Asia. These tariffs raise the initial setup and operational costs for mining companies.

What is the Bitcoin hashrate and why is its decline significant?

The Bitcoin hashrate represents the total computational power securing the Bitcoin network. A decline suggests reduced mining activity, which can affect network security and mining profitability.

How is Bitdeer responding to the rising mining costs?

Bitdeer is shifting from selling mining equipment to self-mining and plans to begin manufacturing hardware within the US to reduce supply chain risks and avoid tariffs.

Will the 90-day tariff pause help US miners?

The 90-day pause provided a short-term opportunity to import equipment at reduced cost, but it's not a long-term solution. Many miners still face elevated costs and uncertain trade conditions.

Is Bitcoin mining still profitable in the US?

Profitability has declined due to higher equipment costs and falling hash price. Larger, more capitalized firms may remain viable, but smaller operations are under pressure.

That's all for today, see ya tomorrow! If you want more, be sure to follow our X (@croxroadnewsco), Instagram (@croxroadnews.co), Youtube (@thebitcoinlibertarian), Tiktok (@croxroadnews) and nostr - [email protected]

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DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.

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