American Bitcoin Corp Aims for 25 EH/s Capacity Despite Geopolitical Risks

American Bitcoin Corp (ABTC), a new proprietary Bitcoin mining entity spun off from Hut 8 and backed by Eric Trump and Donald Trump Jr., is gearing up to go public with ambitious plans to scale its hashing power to 25 EH/s. The company's strategy, however, is heavily reliant on Chinese-manufactured hardware, which introduces significant geopolitical risks.

ABTC, launched on April 1, 2025, is the result of Hut 8's decision to spin off its self-mining business, allowing the parent company to focus on power and data center infrastructure. The company's recent S-4 registration statement, filed as part of its merger with Gryphon Digital, provides insights into its financials and mining strategy. In Q1 2025, ABTC mined 135 BTC and held about 215 BTC in reserves as of May 31. The company currently owns 10.17 EH/s of hashrate capacity, powered by a mix of Bitmain’s S21 series and MicroBT’s M5X and M6X series miners.

ABTC's most ambitious growth lever comes from a 15 EH/s hosting deal that Hut 8 originally signed with Bitmain. Under this agreement, Hut 8 committed to building out hosting infrastructure tailored for Bitmain’s new U3S21EXPH systems, which deliver 860 PH/s each. Once the buildout is complete, Hut 8 holds an option to purchase the entire hardware set, with a maximum purchase price of approximately $320 million for 17,280 U3S21EXPH units. This implies a cost of about $21/TH/s before tariffs and duties. If fully executed, this purchase path would put ABTC on track to exceed 25 EH/s in capacity, placing it among the top publicly traded Bitcoin miners globally.

However, ABTC's growth plans may face geopolitical headwinds. The S-4 filing notes the company’s dependence on imported Bitcoin mining equipment and flags the risk of higher U.S. tariffs on mining hardware made by Chinese companies. The filing states that higher tariffs on imports and subsequent retaliatory tariffs could adversely impact ABTC’s ability to import equipment at levels that are cost-effective. This dependence on foreign technology raises concerns about supply chain vulnerabilities and the potential for disruptions in the company's operations. The filing also notes that any increase in tariffs could lead to higher costs for American Bitcoin, potentially affecting its profitability and ability to achieve its hashing power goals.

ABTC’s direct production cost for the 135 BTC mined in Q1 totaled $11.65 million, or $86,303 per BTC. This figure either reflects Hut 8’s higher-than-peer-average power and maintenance cost or is intended to bolster Hut 8’s recurring hosting revenue from ABTC as Hut 8 pivots away from proprietary mining. The company's reliance on Chinese hardware is a reflection of the broader trend in the Bitcoin mining industry, where Chinese manufacturers dominate the market for mining equipment. This situation underscores the challenges faced by American companies in the Bitcoin mining sector, as they navigate the complexities of international trade and supply chain management.