Hardware Tariffs Threaten U.S. Crypto Mining Returns, Analysts Warn

As Chinese crypto mining rig makers Bitmain, Canaan, and MicroBT look to set up factories in the U.S. to avoid rising tariffs, Ethan Vera, Chief Operations Officer at crypto mining infrastructure provider Luxor, says the move won’t hurt Bitcoin’s network, but it could change where miners choose to invest in the future.

Bitmain began U.S. production late last year, while Canaan and MicroBT are both advancing “localization strategies” to insulate themselves from the evolving trade war, Reuters reported Wednesday. The trio now controls more than 90% of the global mining hardware market, according to Frost & Sullivan, and their efforts mark a strategic response to U.S. tariffs that could reach 30% on Chinese rigs.

While analysts and U.S. crypto mining firms like Auradine have raised alarms about national security risks — pointing to the heavy reliance on Chinese hardware — Vera, speaking with The Defiant, downplayed concerns about the network’s resilience. “We don’t think this is a concern for the network itself,” he told The Defiant. “If U.S. tariffs increase further, we expect more capital to be deployed in countries such as Canada, Brazil, Ethiopia and Paraguay as miners look for new homes.”

Renewed Push for U.S. Manufacturing

Still, the imbalance between hardware origin and mining demand has created a chokepoint. Despite over 30% of Bitcoin mining taking place in North America, nearly all rigs still come from Asia.

Vera believes that’s starting to shift, as the increased tariffs are leading to a “renewed push” to make U.S. manufacturing possible. “We are optimistic that there will be a large increase in machines being assembled and eventually manufactured in the U.S. in a short time frame,” he said.

Yet competing with giants like Bitmain won’t be easy. A U.S. manufacturer would need to compete very closely on price and efficiency, while customer support and warranties “are a secondary concern for miners,” Vera said.

While some experts warn that restrictions on exports from China could destabilize the network, the Luxor COO pointed to the 2021 mining ban in China as proof of Bitcoin’s resilience, noting that within two months, the hashrate “had already migrated to other countries and regained all-time highs by the fall.”