Trump's promise about Bitcoin as a superpower seems to be just empty talk, more like catering to nationalist sentiments rather than a genuine industrial policy.
Written by: Joel, Khalili, Wireded
Translated by: AididiaoJP, Foresight News
Trump's Bitcoin Mining Ambitions
Trump once promised to transform the United States into the global Bitcoin mining capital. However, the recently imposed comprehensive tariff policies have placed this ambition in a dilemma.
The U.S. President paused briefly, enjoying the enthusiastic applause from the audience. At the cryptocurrency conference "Bitcoin 2024", facing a group of passionate Bitcoin believers, he outlined his plan to make the United States a Bitcoin mining superpower.
"I want Bitcoin to be mined, minted, and produced in the United States," he told the audience, "You will be very satisfied with me—you'll be extremely happy."
Since returning to the White House, Trump has largely fulfilled his campaign promises: he began establishing a national Bitcoin reserve, replaced the most stringent regulatory heads against crypto companies from the previous administration, and appointed a "crypto czar" to establish clear regulatory rules for the industry. However, in the critical area of Bitcoin mining, the U.S. President's actions have appeared contradictory, supporting domestic mining companies on one hand while increasing industry operational costs through tariff policies on the other.
The Duality of Tariff Policies
On April 2, Trump announced punitive new tariffs on 57 countries, including tariffs on Chinese goods (later adjusted to 55%), and tariffs of 24% to 36% on Indonesia, Thailand, and Malaysia (where Chinese companies produce some mining machines). This policy challenges U.S. mining companies relying on Chinese suppliers, including Trump's family's newly established mining company "American Bitcoin", facing soaring hardware costs.
However, these tariffs also bring a glimmer of hope: they might support small domestic mining machine manufacturers, as U.S.-made mining machines are not affected by the new import tariffs.
Whether U.S. hardware manufacturers can truly seize this opportunity largely depends on their potential customers and whether U.S. mining companies can withstand the economic impact of the tariff policies.
To ensure supply chain stability, mining companies typically sign long-term procurement agreements with hardware manufacturers. Now, these companies must face a tricky problem: they might need to pay high tariffs on Chinese mining machine orders not yet delivered.
Facing cost pressures, many U.S. mining companies have begun adjusting their business directions, turning to artificial intelligence (AI) and other data center businesses to seek more stable profit sources. This trend risks the vision of a "Bitcoin superpower" being stillborn from the start, with U.S. companies mining using U.S.-made machines on U.S. soil.
"If things continue this way, mining businesses will continue to be squeezed out of the United States," said Chris Bendiksen, Bitcoin research head at investment firm CoinShares, "We may have already witnessed the peak of U.S. mining."
White House spokesperson Kush Desai refuted the suggestion that tariffs might undermine Trump's Bitcoin mining ambitions in a statement to WIRED magazine.
"Two things can be done simultaneously," he said, "We can promote hardware manufacturing localization through tariff policies while using energy policies to reduce Bitcoin mining companies' operational costs."
The Hardware Arms Race in Bitcoin Mining
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Global Layout of Mining Enterprises
Facing challenges in the US market, many mining enterprises have begun to expand their businesses overseas to avoid tariff risks.
"Why do we want to develop international business? Because it can reduce single policy risks," he said. "As a Bitcoin miner, you must maintain flexibility."
Meanwhile, Chinese mining machine manufacturers Bitmain and MicroBT are also accelerating their layout of local production in the United States to bypass tariff barriers.
"We are actively investing in the US market, including local manufacturing," said Irene Gao, President of Bitmain's mining business.
Currently, Bitcoin mining enterprises are generally in a wait-and-see state. Before the 90-day suspension of Trump's new tariffs ends in July, its ultimate impact remains unclear, and many companies have therefore postponed hardware procurement decisions.
"Everyone is waiting to see how the tariff policy will ultimately be implemented," Hermani said.
Contradictory Nature of Trump's Policy
On the surface, Trump's tariff policy seems to be at odds with his ambition to promote the US Bitcoin mining industry.
"These tariffs are obviously destructive," Bendiksen said bluntly.
To achieve both goals - supporting US mining machine manufacturers and ensuring the survival of mining enterprises in the US - the Trump administration may need to use other policy tools, such as promoting energy infrastructure construction to reduce electricity costs for mining enterprises.
The White House claims that a series of recent executive orders will help lower US energy prices. However, the reality is that many mining enterprises are still reducing their domestic businesses and turning to AI or other fields.
"Trump's promise of 'US Bitcoin' currently seems to be just empty talk," Bendiksen concluded, "It's more like catering to nationalist sentiment rather than a real industrial policy."
