The U.S. Bitcoin mining industry is feeling the strain as it grapples with escalating import tariffs and rising competition from spot Bitcoin exchange-traded funds (ETFs), according to a new report by Bitwise Asset Management.
With Bitcoin hashprice an industry-standard profitability metric hitting all-time lows, miners are increasingly vulnerable to shifts in both cost and investor sentiment. The report, authored by Bitwise’s Head of Research André Dragosch and Research Analyst Ayush Tripathi, sheds light on the mounting challenges squeezing one of crypto’s most essential infrastructure sectors.
Import Tariffs Tighten Equipment Costs
The report notes that U.S.-based miners, who collectively operate around 40% of the global hashrate, are now subject to equipment import levies ranging from 24% to 46%. The tariffs primarily affect mining rigs imported from countries such as Vietnam, Thailand, and Malaysia—major manufacturing hubs for Bitcoin mining hardware.
These cost pressures come at a particularly challenging time for miners, as profit margins are already being compressed by the ongoing drop in hashprice. For many firms, the capital outlay required to stay competitive has never been higher.
ETF Demand Crowds Out Capital for Miners
At the same time, investor capital is increasingly being diverted away from mining firms and into financial products like spot Bitcoin ETFs, which offer a lower-risk, more liquid way for investors to gain exposure to Bitcoin’s price movements.
According to the Bitwise report, ETFs and corporate entities such as Strategy and Metaplanet are able to accumulate Bitcoin using cost-efficient methods like equity issuance or convertible debt. This provides investors with immediate upside potential—without the operational risks and long timeframes associated with mining operations.
“This crowds out miners, who must finance heavy upfront capital expenditures, navigate uncertain regulatory terrain, and wait months or even years for their investment to pay off,” the analysts explained.
Strategic Shifts and Regional Realignments
Some mining firms are responding by adjusting their strategies and seeking more cost-effective jurisdictions. For example, Bitfufu, backed by Bitmain, is considering reallocating mining equipment to Ethiopia, while Bitdeer is eyeing Norway and Bhutan as potential growth markets.
U.S.-based mining companies Riot Platforms and CleanSpark attempted to mitigate the impact of tariffs by accelerating equipment shipments ahead of the enforcement deadline. Despite these preemptive moves, Bitwise warns that the broader outlook remains challenging.
“Miners are clearly bracing for more pain,” the report concluded.
Looking Ahead
The combination of rising operational costs and dwindling investor capital presents a formidable challenge for Bitcoin miners. As the industry navigates these headwinds, miners will likely need to evolve rapidly adopting more agile business models, optimizing energy use, and exploring global diversification to maintain profitability.
With Bitcoin’s hash rate reaching record highs and the financialization of crypto through ETFs accelerating, the mining sector finds itself at a pivotal moment caught between innovation and increasing pressure.
