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Coin Geek
3 days ago
- Business
- Coin Geek
China's pivot to US production: Game-changer for Bitcoin mining
Getting your Trinity Audio player ready... Major Chinese mining rig manufacturers—Bitmain, Canaan (NASDAQ: CAN), and MicroBT—are making bold moves to establish production facilities in the United States. This strategic pivot, driven by the need to circumvent escalating trade tariffs and secure supply chains, is seen to reshape the competitive dynamics of the Bitcoin mining ecosystem. For publicly traded miners like MARA Holdings (NASDAQ: MARA), Riot Platforms (NASDAQ: RIOT), and CleanSpark (NASDAQ: CLSK), this development could have profound implications for operational resilience, cost structures, and hash rate expansion strategies. However, the specter of rising tariffs and shifting capital flows looms large, potentially redirecting investment to alternative jurisdictions like Canada and Brazil. The catalyst for this shift is the 30% tariff imposed on Chinese-manufactured mining rigs exported to the U.S., a policy rooted in trade tensions that have persisted since the Trump administration. For miners, who rely on cutting-edge Application-Specific Integrated Circuits (ASICs) to maximize hash rate and optimize energy efficiency, these tariffs inflate capital expenditure (capex) budgets, squeezing margins in an industry where every watt counts. Bitmain, the dominant player in the ASIC market, alongside Canaan and MicroBT, has historically supplied the lion's share of mining hardware to U.S.-based operators. However, with tariffs driving up costs, these manufacturers are investing in U.S.-based production to localize supply chains and mitigate financial headwinds. For publicly traded miners, this move is a double-edged sword. On the one hand, localized production could stabilize hardware costs and reduce supply chain risks, enabling firms like MARA and Riot to execute their aggressive hash rate growth targets. MARA, for instance, reported a record-breaking Q1 2025, with fleet upgrades driving efficiency gains to 23 joules per terahash (J/TH). Access to domestically produced rigs could further enhance their ability to deploy next-generation hardware, such as Bitmain's Antminer S21 Pro, which boasts 17 J/TH. Similarly, CleanSpark's focus on low-cost power and modular infrastructure could benefit from shorter lead times and reduced import costs, bolstering its annualized hash rate guidance of 32 EH/s (exahashes per second) by year-end. However, the transition is not without challenges. Establishing U.S. manufacturing facilities requires significant upfront investment, and Chinese manufacturers may face hurdles in navigating regulatory frameworks, securing skilled labor, and scaling production to meet demand. This could mean temporary supply constraints for miners, particularly as global hash rate approaches 1,000 EH/s, intensifying competition for the latest ASICs. Bitdeer (NASDAQ: BTDR), which recently expanded its hash rate to 11 EH/s, has emphasized the importance of securing reliable hardware pipelines to maintain uptime and profitability. Any disruptions in rig availability could force miners to delay fleet upgrades, impacting their ability to capture Bitcoin's block rewards in a post-halving environment where mining economics are increasingly tight. Moreover, the broader implications of this shift extend beyond U.S. borders. Industry analysts warn that if tariffs escalate further—potentially to 60% or higher under a protectionist U.S. administration—Bitcoin mining capital could flow to jurisdictions with more favorable trade and energy policies. With its abundant hydroelectric power and cooler climate, Canada is quickly becoming a prime destination for miners seeking to optimize opex (operating expenses). Brazil, leveraging its renewable energy mix and supportive regulatory stance, is also attracting attention. Hut 8, a publicly traded miner with operations in Canada, recently highlighted its ability to achieve sub-3-cent-per-kWh power costs, a competitive edge that could draw investment away from the U.S. if tariff pressures mount. The strategic calculus for Chinese manufacturers is clear: localize to protect market share. Bitmain, for example, has reportedly scouted sites in Texas and Nevada, leveraging proximity to major mining hubs and renewable energy sources. Canaan, which went public on NASDAQ in 2019, is exploring partnerships with U.S. firms to accelerate its manufacturing footprint. MicroBT, known for its WhatsMiner series, is similarly eyeing domestic production to maintain its edge in the North American market. For miners, this could translate into more predictable capex cycles and reduced exposure to geopolitical risks, a critical factor as they navigate a market where BTC's price volatility and rising network difficulty (currently at 126.4 trillion) demand operational agility. Yet, the risk of capital flight remains a concern. If U.S. tariffs render domestic production unviable, miners may redirect investments to jurisdictions with lower barriers to entry. This could erode the U.S.'s position as a global mining hub, which currently accounts for over 35% of the global hash rate. Publicly traded miners are already diversifying their portfolios to hedge against such risks. Core Scientific, for instance, has expanded into high-performance computing (HPC) to offset mining volatility, while Riot Platforms is exploring international partnerships to secure low-cost power and hardware. For now, the move by Chinese manufacturers signals a bullish outlook for U.S.-based BTC mining, provided regulatory and economic conditions remain favorable. As MARA's CEO Fred Thiel noted in a recent earnings call, 'Access to efficient, reliable hardware is the backbone of our growth strategy.' Localized production could strengthen that backbone, enabling miners to scale hash rate, optimize energy efficiency, and maintain competitive positioning in a hyper-competitive market. However, the industry must remain vigilant, as tariff escalations or supply chain disruptions could shift the center of gravity to other regions, reshaping the global Bitcoin mining ecosystem. In conclusion, the pivot by Bitmain, Canaan, and MicroBT to U.S. production is a strategic response to trade barriers with significant implications for publicly traded miners. While it promises cost stability and supply chain resilience, the specter of rising tariffs and capital flight underscores the need for agility and diversification. As the Bitcoin mining industry navigates these headwinds, the ability to secure cutting-edge hardware and low-cost power will remain the cornerstone of sustainable growth. Watch | Bitcoin mining in 2025: Is it still worth it? title="YouTube video player" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" referrerpolicy="strict-origin-when-cross-origin" allowfullscreen>
South China Morning Post
19-06-2025
- Business
- South China Morning Post
Trump's tariffs see makers of Chinese bitcoin-mining machines eye US production
The world's three bestselling makers of bitcoin-mining machines – all of Chinese origin – are setting up manufacturing footholds in the US as President Donald Trump's tariff war reshapes the cryptocurrency supply chain. Bitmain, Canaan and MicroBT build over 90 per cent of global mining rigs – essentially computers dedicated to number-crunching that produces bitcoin. Establishing US bases could shield them from tariffs but risks stoking security concerns the US has with China in areas as varied as chipmaking and energy security. 'The US-China trade war is triggering structural, not superficial, changes in bitcoin's supply chains,' said Guang Yang, chief technology officer at crypto tech provider Conflux Network. Moreover, for US firms, 'this goes beyond tariffs. It's a strategic pivot toward 'politically acceptable' hardware sources', Yang said. Bitcoin-mining computers in Bitmain's mining farm. Photo: Reuters Bitmain, the biggest of the three by sales, started US production of mining rigs in December in a 'strategic move' following Trump's presidential electoral win a month earlier.
Fast Company
18-06-2025
- Business
- Fast Company
How Trump's disruption of the crypto supply chain could be a security risk for the U.S.
The world's three best-selling makers of bitcoin mining machines — all of Chinese origin — are setting up manufacturing footholds in the United States as President Donald Trump's tariff war reshapes the cryptocurrency supply chain. Bitmain, Canaan and MicroBT build over 90% of global mining rigs — essentially computers dedicated to number-crunching that produces bitcoin. Establishing U.S. bases could shield them from tariffs but risks stoking security concerns the U.S. has with China in areas as varied as chip making and energy security. 'The U.S.-China trade war is triggering structural, not superficial, changes in bitcoin's supply chains,' said Guang Yang, chief technology officer at crypto tech provider Conflux Network. Moreover, for U.S. firms, 'this goes beyond tariffs. It's a strategic pivot toward 'politically acceptable' hardware sources,' Yang said. Bitmain, the biggest of the three by sales, started U.S. production of mining rigs in December in a 'strategic move' following Trump's presidential electoral win a month earlier. Canaan started trial production in the U.S. with the aim of avoiding tariffs after Trump on April 2 announced his so-called Liberation Day levies, senior executive Leo Wang told Reuters. The initiative is exploratory as the volatile tariff situation precludes heavy investment, he said. Third-ranked MicroBT in a statement said it is 'actively implementing a localisation strategy in the U.S.' to 'avoid the impact of tariffs'. The trio dominate a sector analysts estimated to be worth $12 billion by 2028. It is the upstream of a business chain that extends through the energy-intensive process of mining bitcoin, the supporting IT infrastructure and the trading platforms. U.S. rival Auradine — backed by top bitcoin miner by market value, MARA Holdings — has been lobbying to restrict Chinese supplies to stimulate competition in hardware. 'While over 30% of global bitcoin mining occurs in North America, more than 90% of mining hardware originates from China representing a major imbalance of geographic demand and supply,' said Auradine's chief strategy officer, Sanjay Gupta. Consultancy Frost & Sullivan estimated the top three held 95.4% of the hardware market in terms of computing power sold as of December 2023. When it comes to Chinese mining rigs, 'hundreds of thousands of them connected to the U.S. electrical grid' is a security risk, Gupta said. Canaan's Wang said mining rigs do not threaten security because 'they are useless if not applied to bitcoin mining'. Still, manufacturers could suffer 'collateral damage' from U.S. restrictions on high-tech sales to Chinese firms, he said. Underscoring the risk, Bitmain's AI affiliate, Sophgo, has been blacklisted by the U.S. government on security grounds. Bitmain did not reply to a request for comment. FIRST-MOVER China once dominated the entire bitcoin value chain — from rig-making through mining to trading — until its government banned cryptocurrency activity on the Chinese mainland in 2021 citing risk to financial stability. Miners, traders and exchanges moved abroad. Shielded by their role as technology manufacturers, however, Bitmain, Canaan and MicroBT continued to dominate in hardware. They fended off Western rivals partly due to first-mover advantage in developing high-performance chips tailor-made for mining. Canaan has since moved its headquarters to Singapore from China — though it still has Chinese operations – and set up a pilot production line in the U.S., a market that contributed 40% of revenue last year. 'The rationale is to try to reduce the cost for both us and our customers,' said Wang, Canaan's vice president of corporate development and capital markets. The prospect of tariffs means 'we have to explore all alternatives'. The U.S. this year imposed a 10% baseline tariff on imports from many countries plus an extra 20% on imports from China. It has also said it could increase tariffs for Southeast Asian countries where Chinese rig makers have set up assembly plants. CHOKE POINT Trump has promised to be the 'crypto president' who popularises cryptocurriencies' mainstream use in the United States. Son Eric Trump together with energy and technology firm Hut 8 launched miner American Bitcoin with the goal of building a strategic bitcoin reserve. The president's crypto-friendly policies, however, can only highlight China's outsized role in bitcoin infrastructure, potentially putting rig makers in the crosshairs. China's hardware dominance 'creates a choke point for U.S. miners,' said John Deaton, a U.S. crypto-law attorney. 'If China restricts exports or manipulates supply … it could disrupt bitcoin's network stability and affect U.S. users and investors,' Deaton said. The biggest miners by market value — MARA, Core Scientific, CleanSpark and Riot Platforms — are all U.S.-based, so over-reliance on hardware of Chinese origin 'is potentially problematic', said Ryan M. Yonk, an economist at the American Institute for Economic Research. Chinese rig makers might be setting up shop in the U.S. but in the short term, U.S. miners will still buy rigs from China and be stung by higher import costs, said Kadan Stadlemann, chief technology officer at crypto platform Komodo. 'But this isn't about hurting the industry. It's about forcing a long-overdue shift,' he said.
Tahawul Tech
18-06-2025
- Business
- Tahawul Tech
How Chinese bitcoin manufacturers are circumventing U.S. tariffs
Three of the world's top providers of bitcoin mining machines – all Chinese based – are – are setting up manufacturing footholds in the United States as President Donald Trump's tariffs reshape the cryptocurrency supply chain. Bitmain, Canaan and MicroBT build over 90% of global mining rigs – essentially computers dedicated to number-crunching that produces bitcoin. Establishing U.S. bases could shield them from tariffs but risks stoking security concerns the U.S. has with China in areas as varied as chip making and energy security. 'The U.S.-China trade war is triggering structural, not superficial, changes in bitcoin's supply chains,' said Guang Yang, chief technology officer at crypto tech provider Conflux Network. Moreover, for U.S. firms, 'this goes beyond tariffs. It's a strategic pivot toward 'politically acceptable' hardware sources,' Yang said. Bitmain, the biggest of the three by sales, started U.S. production of mining rigs in December in a 'strategic move' following Trump's presidential electoral win a month earlier. Canaan started trial production in the U.S. with the aim of avoiding tariffs after Trump on April 2 announced his so-called Liberation Day levies, senior executive Leo Wang told Reuters. The initiative is exploratory as the volatile tariff situation precludes heavy investment, he said. Third-ranked MicroBT in a statement said it is 'actively implementing a localisation strategy in the U.S.' to 'avoid the impact of tariffs'. The trio dominate a sector analysts estimated to be worth $12 billion by 2028. It is the upstream of a business chain that extends through the energy-intensive process of mining bitcoin, the supporting IT infrastructure and the trading platforms. Source: Reuters Image Credit: Stock Image
The Sun
18-06-2025
- Business
- The Sun
Dominant Chinese makers of bitcoin mining machines set up US production to beat tariffs
THE world's three best-selling makers of bitcoin mining machines - all of Chinese origin - are setting up manufacturing footholds in the United States as President Donald Trump's tariff war reshapes the cryptocurrency supply chain. Bitmain, Canaan and MicroBT build over 90% of global mining rigs - essentially computers dedicated to number-crunching that produces bitcoin. Establishing U.S. bases could shield them from tariffs but risks stoking security concerns the U.S. has with China in areas as varied as chip making and energy security. 'The U.S.-China trade war is triggering structural, not superficial, changes in bitcoin's supply chains,' said Guang Yang, chief technology officer at crypto tech provider Conflux Network. Moreover, for U.S. firms, 'this goes beyond tariffs. It's a strategic pivot toward 'politically acceptable' hardware sources,' Yang said. Bitmain, the biggest of the three by sales, started U.S. production of mining rigs in December in a 'strategic move' following Trump's presidential electoral win a month earlier. Canaan started trial production in the U.S. with the aim of avoiding tariffs after Trump on April 2 announced his so-called Liberation Day levies, senior executive Leo Wang told Reuters. The initiative is exploratory as the volatile tariff situation precludes heavy investment, he said. Third-ranked MicroBT in a statement said it is 'actively implementing a localisation strategy in the U.S.' to 'avoid the impact of tariffs'. The trio dominate a sector analysts estimated to be worth $12 billion by 2028. It is the upstream of a business chain that extends through the energy-intensive process of mining bitcoin, the supporting IT infrastructure and the trading platforms. U.S. rival Auradine - backed by top bitcoin miner by market value, MARA Holdings - has been lobbying to restrict Chinese supplies to stimulate competition in hardware. 'While over 30% of global bitcoin mining occurs in North America, more than 90% of mining hardware originates from China representing a major imbalance of geographic demand and supply,' said Auradine's chief strategy officer, Sanjay Gupta. Consultancy Frost & Sullivan estimated the top three held 95.4% of the hardware market in terms of computing power sold as of December 2023. When it comes to Chinese mining rigs, 'hundreds of thousands of them connected to the U.S. electrical grid' is a security risk, Gupta said. Canaan's Wang said mining rigs do not threaten security because 'they are useless if not applied to bitcoin mining'. Still, manufacturers could suffer 'collateral damage' from U.S. restrictions on high-tech sales to Chinese firms, he said. Underscoring the risk, Bitmain's AI affiliate, Sophgo, has been blacklisted by the U.S. government on security grounds. Bitmain did not reply to a request for comment. FIRST-MOVER China once dominated the entire bitcoin value chain - from rig-making through mining to trading - until its government banned cryptocurrency activity on the Chinese mainland in 2021 citing risk to financial stability. Miners, traders and exchanges moved abroad. Shielded by their role as technology manufacturers, however, Bitmain, Canaan and MicroBT continued to dominate in hardware. They fended off Western rivals partly due to first-mover advantage in developing high-performance chips tailor-made for mining. Canaan has since moved its headquarters to Singapore from China - though it still has Chinese operations - and set up a pilot production line in the U.S., a market that contributed 40% of revenue last year. 'The rationale is to try to reduce the cost for both us and our customers,' said Wang, Canaan's vice president of corporate development and capital markets. The prospect of tariffs means 'we have to explore all alternatives'. The U.S. this year imposed a 10% baseline tariff on imports from many countries plus an extra 20% on imports from China. It has also said it could increase tariffs for Southeast Asian countries where Chinese rig makers have set up assembly plants. CHOKE POINT Trump has promised to be the 'crypto president' who popularises cryptocurriencies' mainstream use in the United States. Son Eric Trump together with energy and technology firm Hut 8 launched miner American Bitcoin with the goal of building a strategic bitcoin reserve. The president's crypto-friendly policies, however, can only highlight China's outsized role in bitcoin infrastructure, potentially putting rig makers in the crosshairs. China's hardware dominance 'creates a choke point for U.S. miners,' said John Deaton, a U.S. crypto-law attorney. 'If China restricts exports or manipulates supply ... it could disrupt bitcoin's network stability and affect U.S. users and investors,' Deaton said. The biggest miners by market value - MARA, Core Scientific , CleanSpark and Riot Platforms - are all U.S.-based, so over-reliance on hardware of Chinese origin 'is potentially problematic', said Ryan M. Yonk, an economist at the American Institute for Economic Research. Chinese rig makers might be setting up shop in the U.S. but in the short term, U.S. miners will still buy rigs from China and be stung by higher import costs, said Kadan Stadlemann, chief technology officer at crypto platform Komodo. 'But this isn't about hurting the industry. It's about forcing a long-overdue shift,' he said.
