Bitcoin Miners Rush to Beat Tariffs, Charter Flights Costing Millions

Bitcoin miners are urgently adapting to the potential impact of global tariffs imposed by the Trump administration, which are set to increase the costs of ASIC miners, electrical equipment, and network infrastructure. The situation has led to a frenzy of activity as miners rush to secure shipments before the tariffs take effect. Ethan Vera, COO of Luxor, described the current scenario as a "complete scramble," with miners scrambling to ensure that shipments from Southeast Asia are delivered promptly.

In response to the proposed tariffs, which were initially set to take effect on April 9, top mining firms chartered flights at significantly higher rates to expedite the delivery of ASIC miners. Estimates provided to Blockspace by Synteq Digital CEO Taras Kulyk and Luxor’s Vera indicated that these flights cost anywhere from $2 million to $3.5 million each, highlighting the urgency and financial strain faced by the industry.

The initial panic was triggered by the Trump administration's proposal for blanket tariffs on more than 180 countries, including substantial increases on Malaysia, Thailand, and Indonesia—key manufacturers of ASIC mining computers. However, a 90-day pause on all but Chinese tariffs was announced, followed by a plan to lower the reciprocal tariffs to a flat rate of 10% for all affected countries. This development has somewhat alleviated the immediate crisis, but the volatile nature of the administration's trade policies leaves the future uncertain.

Even at the reduced rate of 10%, the tariffs are expected to hinder the deployment of hashrate in the U.S., which currently dominates the global hashrate with an estimated 35-40% share. The tariffs are likely to slow the growth of Bitcoin's hashrate this year, deviating from prior expectations. Blockspace estimates that U.S. bitcoin miners imported over $2.3 billion worth of ASIC miners last year and over $860 million in the first quarter of this year, primarily from Malaysia, Thailand, and Indonesia.

Bitmain and MicroBT, which together control over 90% of the ASIC miner market, relocated their manufacturing capacity to Malaysia, Thailand, and Indonesia in response to the initial China tariffs. MicroBT opened a U.S. assembly plant in 2023, and Bitmain established its first U.S. assembly line in January. However, these plants represent only a fraction of their total production, and the tariffs on raw materials will still increase the cost of domestically produced ASICs.

Kulyk noted that U.S. production will have a material discount compared to imported hardware but will still be more expensive due to tariffs on raw materials like aluminum and electronic components. Vera added that Chinese electrical components face a 50% or higher tariff, affecting everything from ASIC miner prices to electrical infrastructure at mining sites. This increase in costs is expected to make existing U.S. mining facilities more valuable, potentially leading to more merger and acquisition deals as miners seek to expand without importing equipment.

In the medium term, the tariffs are seen as a significant setback for the U.S. bitcoin mining sector, likely stagnating industry growth if the tariffs continue. Vera emphasized that higher costs for mining equipment in the U.S. will make it difficult for American miners to compete with international miners in countries like Canada, Russia, and potentially Northern Europe, South America, and parts of Africa. The tariffs could also lower the cost of ASICs in other markets, as international miners will not face the same level of competition from U.S. buyers.

Vera compared the potential impact of the tariffs to the China mining ban, suggesting that hashrate could shift away from the U.S. to other countries. He concluded that while network hashrate may continue to rise, the U.S. has been a significant contributor to this growth as an energy superpower, and there is limited power available for expansion.