Cost and supply chain disturbances, in-depth interpretation of the impact of tariff policies on Bitcoin mining
Reprinted from panewslab
04/28/2025·15Dsummary
●In April 2025, the Trump administration announced the launch of the "peer-to-peer tariff" policy, placing a unified "minimum benchmark tariff" on global trading partners, which triggered a violent shock in global risky assets.
●Bitcoin is a public chain that mainly adopts the PoW (Proof of Work) mechanism. The PoW mechanism relies on physical mining machines for mining. The mining machines are not on the US tariff exemption list, so mining companies face greater cost pressure.
●The decline of mining machine manufacturers in the past month is the most obvious. The core reason is that mining machine manufacturing has suffered from tariff policies on both the supply and demand sides.
●The self-operated mines are mainly affected by the supply side, and the business process of selling Bitcoin to cryptocurrency exchanges is less affected by the tariff policy.
●The cloud computing power mines are relatively least affected by tariff policies, because the essence of cloud computing power is to pass on the purchase cost of mining machines to customers through computing power service fees, so the erosion of platform profits is significantly weaker than that of traditional mining models.
●Although the tariff policy has hit the Bitcoin mining industry in the United States, the Bitcoin spot ETF funds represented by BlackRock IBIT and the US stock hoarding companies represented by MicroStrategy still have the right to price Bitcoin.
●Bitcoin price is no longer the only indicator, policy trends, geopolitical security, energy scheduling, and manufacturing stability are the real keys to mining survival.
Keywords: Gate Research, Tariffs, Bitcoin, Bitcoin Mining
Preface
On April 2, the Trump administration announced the launch of the "peer-to-peer tariff" policy, imposing a "minimum benchmark tariff" of 10% on global trading partners, and imposing "personalized" high tariffs on countries with significant trade deficits. The policy triggered a sharp fluctuation in global risky assets, with both the S&P 500 and the Nasdaq hitting the biggest single-day decline since March 2020; assets in the cryptocurrency industry also shrunk significantly. Since Trump announced his tariff policy, China announced an increase of 84% retaliatory tariffs on the United States, the EU imposed 25% tariffs on 21 billion euros of US goods, and the total market value of the global stock market evaporated by more than $10 trillion in a week.
On April 9, the tariff policy reversed, and Trump announced that he would suspend the imposition of tariffs on 75 countries except China for 90 days. The EU suspended the imposition of tariffs and started negotiations with the US. On the same day, the S&P 500 rose 9.51%, the Nasdaq rose 12.02%, the price of Bitcoin rebounded 8.19% to $82,500, and the price of Ethereum rebounded to $1,650.
Among the many crypto assets tracks, Bitcoin mining has become one of the most directly affected on-chain economic modules due to its strong dependence on hardware equipment, wide global supply chain span and high capital intensity. Global trade frictions caused by US reciprocity tariffs have multiple impacts on crypto mining. As most of the world's Bitcoin mining machines are made in China, the Sino-US tariff war will push up the import cost of mining machines. China's export tax rate to the United States will increase to 145%, which will compress North American mining farm expansion plans; the depreciation of the RMB has intensified the pressure on US dollar bonds of Chinese mining companies, coupled with fluctuations in electricity and energy prices, and operating costs continue to rise. At the same time, fluctuations in the currency price also affected miners' income, and the price of Bitcoin once retreated from US$82,500 before the tariff announcement to below US$75,000.
At the macro level, the Fed's concerns about stagflation and risk aversion are combined, the high yield on 10-year US Treasury suppresses risk appetite, the financing environment tightens, and the stock prices of mining companies fell simultaneously with the technology sector. Against the backdrop of geopolitical tensions, the global mining layout is facing reconstruction, and enterprises may accelerate the transfer to tariff-friendly regions such as Southeast Asia and the Middle East. In the short term, policy uncertainty will continue to amplify the risks of Bitcoin mining, and the industry may enter a new round of reshuffle.
1. Bitcoin mining has suffered direct impact on tariff policies, and the
stock prices of most related companies have fallen by more than the NASDAQ 100 Index
Bitcoin is a public chain that mainly adopts the PoW (Proof of Work) mechanism and is also the crypto asset with the highest market value, and is widely regarded as "digital gold". Since the PoW mechanism relies on physical mining machines for mining, and mining machines and their upstream key components such as semiconductors are not on the tariff exemption list, relevant mining companies are therefore facing greater cost pressure. The upstream impact brought by tariff policies may indirectly affect the medium- and long-term trend of Bitcoin prices through a cost transmission mechanism.
The main ecosystems of Bitcoin mining include mining machines, self-operated mining farms, and cloud computing power mining farms. Mining machine companies include Bitmain, Canaan Technology (NASDAQ: CAN), Bitwei, EBON International (NASDAQ: EBON), etc. The main factories of several companies are located in mainland China. Among them, Bitmain occupies a major share of the mining machine market (its market share disclosed in the 2018 prospectus is more than 70%).
Self-operated mining companies include Marathon Digital (NASDAQ: MARA), Riot Platform (NASDAQ: RIOT), Cleanspark (NASDAQ:CLSK) and other companies. The headquarter of the self-operated mining companies listed on Nasdaq is located in the United States, but their mining farms are distributed in many countries such as the United States, the United Arab Emirates, and Paraguay. Marathon has the largest mine in the world, with a total computing power of more than 54EH/s, accounting for about 6% of the current computing power of the entire network.
The main companies of Yuncomputer Mining Farm include Ant Mining Pool, Bitdeer (NASDAQ: BTDR), BitFufu (NASDAQ: BFBF), Ecos and other companies. Unlike self-operated mines, cloud computing power mines pass on the risk of Bitcoin price fluctuations to customers by packaging and selling the computing power required for mining to individual or institutional customers. The platform itself focuses on site selection, construction and daily operations of the mine. Bitdeer has some self-operated mines and some cloud computing power mine businesses. BitFufu only has cloud computing power services.
The stock prices of Bitcoin mining-related companies fell due to the impact of Trump's tariff policies. Both of its declines exceeded the Nasdaq 100 index. Through Yahoo's yfinance database, the author captured the closing prices of 8 Bitcoin mining-related companies in the past month, as well as the NASDAQ 100 index as a reference standard. When Trump announced the tariff policy on April 2, the stock prices of Bitcoin mining-related companies all fell sharply, and after Trump announced the tariff policy on April 9, the stock prices of Bitcoin mining-related companies rebounded significantly.
After the data has been standardized, since the tariff policy was promulgated on April 2, mining machines have been the most obvious decline in Bitcoin mining industry. Canaan Technology fell by more than 17%, and Yibang International fell by more than 11%. The second is the self-operated mining sector, with Core Scientific leading the decline, with a drop of more than 10% in the past month; Marathon's decline was only 0.8%, the lowest in this sector. Finally, the cloud computing power mine was less affected by this, and BitFufu fell only 5.9%. The NASDAQ100 index, as reference standard, fell 2.2%
Table 1: Bitcoin Mining Companies and Nasdaq 100 Index (NDX) Performance in the past month
2. Analysis on the impact of various sectors of Bitcoin mining due to
tariff policies
After Trump announced the tariff policy, Bitcoin mining-related companies all fell to varying degrees, but as mentioned above, the stock price performance of each sub-sector also showed a certain degree of differentiation. This core reason is that all links of the Bitcoin mining supply chain are subject to different levels of tariffs.
Figure 1: Bitcoin mining core supply chain
2.1 Mining machine manufacturer
Judging from the stock price performance, mining machine manufacturers have fallen the most obvious in the past month. The core reason is that mining machine manufacturing has suffered from tariff policies on both the supply and demand sides. The upstream of mining machine production are foundries such as TSMC, Samsung, and SMIC. The mining machine company first independently completes the IC design of the ASIC chip, and then delivers the drawings to the agency factory for slitting. After the slitting is successful, the factory will mass produce the ASIC chip. The mining machine company takes the chip and packages it into a miner.
TSMC occupies 64.9% of the market share in chip foundry [1]. The Trump administration requires TSMC to build factories in the United States, otherwise it will impose more than 100% tariffs on it [2]. Foundries such as SMIC, Huahong Semiconductor, and Samsung are also under high tariff pressure from the United States. OEM factories only have two options: paying tariffs and reducing orders from the United States. No matter which one, it will cause the profits of OEM factories to decline. This part of the pressure may be transferred to downstream mining machine manufacturers, allowing manufacturers to pay higher prices to increase the gross profit margin of OEM orders.
From the demand side, since the registered locations of Bitmain, Canaan Technology, Bitwei and other companies are all in China, American mining sites such as Marathon, Riot, and Cleanspark have to bear high tariffs and pay higher costs when purchasing mining machines. Therefore, in the short term, the orders of mining machines will shrink significantly. Take Bitmain's main model Ant S21 Pro and Canaan Technology's main model Avalon A15 Pro as an example. Before the tariff policy is implemented, without considering the operating costs, assuming that the electricity price cost is $0.043/KWH (Cleanspark's electricity price cost in 2024) [3], the computing power of the entire network is 850EH/s [4], and the depreciation period of the mining machine is 30 months [5]. Currently, the cost of each bitcoin mined by S21 Pro is $68,367, and the cost of each bitcoin mined by A15 Pro is $75,801.
Table 2: Parameters of mainstream mining machines in Bitcoin mining industry
Note 1: The main calculation formula is as follows:
Cumulative number of coins mined = mining machine computing power × 60× 24×365× depreciation period × block yield reward/10/ network computing power/1000,000
Total cost = mining machine price + mining machine computing power × mining machine power consumption × electricity charge × 24 × 365/1,000 (no personnel and site rental costs are calculated)
Coin mining cost = Total cost / cumulative number of coins
Once the tariff policy is implemented and under optimistic circumstances, the selling price of export mining machines will increase by 30% on the original basis. The cost of each bitcoin mined by S21 Pro is $80,105, and the cost of every bitcoin mined by A15 Pro is $88,717. Under pessimistic situation, the selling price of export mining machines increased by 70% on the original basis, so the cost of each bitcoin mined by S21 Pro is $95,756, and the cost of each bitcoin mined by A15 Pro is $105,938.
Table 3: Coin mining costs of mining machines under different tariff situations
The above prices have not yet taken into account the complex operating costs of the mine. The operating costs include site leasing costs and personnel costs. If this part of the cost is included, the cost of mining coins will further increase. The significant increase in tariffs will cause mines to bear higher cost of mining coins, and the weakening of demand side will also have a major impact on upstream mining machine manufacturers.
From a long-term perspective, mining machine manufacturers may give priority to the capacity layout in areas with friendly tariff policies, and effectively avoid potential tariff policy risks through global capacity allocation strategies and achieve supply chain cost optimization.
2.2 Self-operated mines
Compared with mining machine manufacturers being squeezed by both supply and demand, self-operated mines are mainly affected by the supply side, and the business process of selling Bitcoin to cryptocurrency exchanges is less affected by tariff policies. Bitcoin price is affected by tariff policies, and funds abhor uncertain policies, so short-term funds choose to flow out, and Bitcoin has seen a significant decline. However, self-operated mines represented by Marathon will choose to hoard coins when there is sufficient cash flow, and will not sell them on the exchange immediately after Bitcoin is mined. Similar to MicroStrategy's debt-buying strategy, Marathon has issued convertible bonds many times to directly purchase Bitcoin. Therefore, large mines are relatively less affected by the decline in Bitcoin prices. 【8】【9】【10】【11】
For small mines with tight cash flow, the decline in Bitcoin prices has a particularly significant impact on their stock prices. Due to limited funds, these mines are usually unable to hold mined bitcoins for a long time and can only be sold immediately after mining to maintain operating funds. During the market downturn, this "digging and selling" strategy may intensify the market's selling pressure and further affect the Bitcoin price trend. As shown in the figure below, the number of Bitcoin held by Cipher and Hive in March 2025 was 1,034 and 2,201, respectively, down 40% and 3% year-on-year, respectively; while the number of Bitcoin held by Marathon and Riot in March 2025 was 47,531 and 19,223, respectively, up 173% and 126% year-on-year, respectively.
Table 4: Changes in the number of coins held by self-operated mining companies (January 2024 to March 2025)
In the past month, the stock price of small and medium-sized self-operated mines, Cipher and Hive Digital, have risen and fallen by -7.1% and -5.5% respectively since the tariff policy was announced, and the decline in stock prices has significantly exceeded that of large mines such as Marthon and other major mines that adhere to the coin hoarding strategy.
However, in the long run, the depreciation cycle of mining equipment is usually 2.5 to 3 years, which means that self-operated mines need to continue capital expenditure (CAPEX) to purchase new mining machines to replace old equipment. Although the statistical calibers adopted by various mining companies when disclosing computing power data (such as average monthly computing power, power-on computing power, end-of-month computing power, etc.), it is difficult to directly compare the computing power indicators between different companies. From January 2024 to March 2025, the computing power data disclosed by mainstream listed mining companies showed that the computing power growth rate generally exceeded 70%. The core driving force for the continuous growth of computing power lies in "relative competitiveness": Against the backdrop of the continuous increase in computing power across the entire network, if the mine's own computing power does not increase accordingly, the amount of Bitcoin it can mine will continue to decline. Bitcoin mining is a dynamic game, and the expansion of computing power is like sailing against the current, and if you don’t advance, you will retreat.
Against this background, if the tariff policy of mining machinery is officially implemented, the cost increase pressure of upstream mining machinery manufacturers will inevitably be transmitted to downstream mining farms, further pushing up the industry's marginal production costs and posing a challenge to the profitability of China mining farms.
2.3 Cloud computing power mine
Cloud computing power mines are essentially a leasing model, with mining machine manufacturers upstream and individual and institutional customers downstream. Cloud computing power mines do not hold coins or sell coins, but package 30-day, 60-day, and 90-day computing power to customers. Customers will choose to stock up or sell coins based on their own judgment. Therefore, cloud computing power mines mainly earn service fees paid by customers, and do not directly bear the profits or losses caused by the rise and fall of Bitcoin.
The core competitiveness of cloud computing power mines lies in reducing leasing, electricity and labor costs through site selection optimization, while maintaining a high degree of flexibility in computing power deployment to cope with market fluctuations. In bull markets, mining machines and sites need to be quickly expanded to meet customer needs, and in bear markets, operations need to be streamlined and redundant computing power must be turned into self-mining. This dynamic balance ability directly determines the company's market competitiveness.
The revenue of cloud computing power companies is mainly driven by the computing power of the entire network. When the computing power of the entire network increases, it proves that most miners are still optimistic about the price of Bitcoin in the future, and more customers may choose to buy cloud computing power; when the computing power of the entire network declines, it means that miners are not optimistic about the trend of Bitcoin price, and the part of cloud computing power of the entire network will also decrease. The data below shows that after Trump announced his tariff policy on April 2, Bitcoin's average daily computing power even hit a record high on April 5, breaking through 1 ZH/s for the first time. 【12】
Figure 2: Changes in Bitcoin’s computing power across the entire network (January 2025 to April 2025)
From the cost side, although the price of mining machines is under the transmission of tariff policies, the leasing business model of cloud computing power mines naturally has a risk buffering mechanism - its essence passes on the purchase cost of mining machines to customers through computing power service fees, and some customers directly share hardware investment through mining machine custody agreements, making the erosion of platform profits by mining machine premiums significantly weaker than the traditional mining model. This cost transfer and sharing feature has made cloud computing power mines a less impacted area under the Trump administration's tariff policy.
3. The impact of the reshaping of the Bitcoin mining landscape on the
price of Bitcoin
The United States has recently imposed tariffs on Bitcoin mining equipment imported from China and other countries, resulting in a significant increase in operating costs for American miners. This provides a greater potential opportunity for non-U.S. companies to enter the Bitcoin mining industry, as they can acquire a cost advantage by purchasing Chinese-made mining machines from other countries at a lower cost. Although U.S. mines can avoid some of the tariff impacts by setting up operating bases overseas, it is undeniable that these tariff policies increase the operating costs and policy risks of U.S. local mines.
According to the above deduction, the daily output of Bitcoin is 450, and the miners who mine Bitcoin will be more scattered, and the voice of American mining companies such as Marathon, Riot, and Cleanspark may decline. Since large mining companies such as Marathon have adopted the coin hoarding strategy in the past, while companies that potentially enter the mining industry in other countries have not yet been clear about their holdings of Bitcoin, they may choose the "mining, withdrawing, selling" (withdrawing, and selling on the exchange immediately after mining Bitcoin). From this perspective, the overall negative for Bitcoin price trend is the high tariff policy. Some mining farms left the United States, which also violated Trump's original intention to ensure that all remaining Bitcoins achieve "Made in the United States".
But in the long run, the core logic of Bitcoin has undergone fundamental changes in 2024. Bitcoin spot ETF funds represented by BlackRock IBIT and US stock hoarding companies represented by MicroStrategy still have the right to price Bitcoin. As of April 2025, IBIT held 570,983 Bitcoins [13] and MicroStrategy held 528,185 Bitcoins [14]. The Bitcoin holdings of both continue to increase in the total circulation of Bitcoin [15], and the purchasing power of both is enough to digest the number of newly produced Bitcoins every day.
Table 5: Bitcoin holding ratio between MicroStrategy and IBIT
Summarize
The Trump administration's promotion of the "peer-to-peer tariff" policy poses a dual challenge to the upstream cost and geopolitical layout of Bitcoin mining. Mining machine manufacturers are under the heaviest pressure due to the restrictions on OEM chain and the reduction in demand, while self-operated mines face the double squeeze of upward cost and growth in capital expenditures. Cloud computing power mines have relatively buffering capabilities based on the "risk transfer" mechanism. Overall, the pace of mining expansion in North America may be limited, global computing power will be further dispersed to low-tariff areas such as Southeast Asia and the Middle East, and the voice of US mining companies in the Bitcoin ecosystem may decline in phases.
Mining companies often invest hugely, have long cycles, and have weak risk resistance; the Bitcoin network itself cannot actively regulate these risks, and its mechanism is "open, fair, and competitive", rather than "defense, response, and regulation". This creates a structural contradiction: the industrial chain behind the world's most decentralized assets is one of the areas most vulnerable to centralized policy intervention. Therefore, mining players must re-understand the importance of policy. Bitcoin price is no longer the only indicator, and policy trends, geopolitical security, energy scheduling, and manufacturing stability are the real keys to mining survival.
In the short term, the rise in mining costs and the "mining and selling" behavior of some miners may constitute marginal negative for the price of Bitcoin; but in the medium and long term, institutional forces represented by BlackRock IBIT and MicroStrategy have become the dominant force in the market, and their continuous buying ability is expected to hedge supply pressure and maintain market structure. Bitcoin mining is in a critical period of policy reshaping and structural transfer. Global investors need to pay close attention to the rebalancing of the industrial chain brought about by policy evolution and computing power migration.
Source of data
1. Patent PC, https://patentpc.com/blog/tsmc-samsung-and-intel-whos-leading-the-semiconductor-race-latest-market-share-data
3. Cleanspark, https://www.sec.gov/Archives/edgar/data/827876/000095017024056324/clsk-ex99_1.htm
4.Bitinfocharts,https://bitinfocharts.com/comparison/bitcoin-hashrate.html
5.CoinShares Research, http://www.minerupdate.com/news/miner-insights/majority-of-bitcoin-miners-profitable-at-current-prices-according-to-coinshares-research
6. Bitmain, https://m.bitmain.com/cn/product/detail?pid=00020240402210032893O1Et7keX0682
7. Canaan, https://shop.canaan.io/products/avalon-miner-a15pro?VariantsId=10492
8. Marathon Digital, https://ir.mara.com/news-events/press-releases
9. Riot Platform, https://www.riotplatforms.com/overview/news-events/press-releases/
10. Cipher, https://investors.ciphermining.com/news-events/press-releases
11. Hive Digitalhttps://hivedigitaltechnologies.com/news/
12. Bitinforcharts,https://bitinfocharts.com/comparison/bitcoin-hashrate.html#3m
13. iShares, https://www.ishares.com/us/products/333011/ishares-bitcoin-trust-etf
14. Bitbo, https://treasuries.bitbo.io/microstrategy/
15. Finance M Square https://sc.macromicro.me/series/8120/bitcoin-circulating-supply【Bitcoin Mining Core Supply Chain https://docs.google.com/presentation/d/1BjG5mUX7eeIw48ILD6VqIlnsOQY2fQhYXigXw5XxqL4/edit?slide=id.p#slide=id.p]
