Russia seen as largest Bitcoin mining beneficiary if Trump's tariffs hit in full, industry expert says

Despite President Donald Trump's embrace of crypto and desire to make the U.S. a "Bitcoin mining powerhouse," companies in the industry have been rushing to adjust their short and long-term plans in an attempt to weather the impact of the president's tariff policies, with Russia potentially the main beneficiary.

Trump's tariff announcements hit both traditional and crypto markets hard between February and early April, especially following " Liberation Day ," when he laid out reciprocal import tariffs with a baseline of 10% and more than 50% in some cases. However, a 90-day tariff pause for most countries, except China, subsequently offered some relief that has continued into May.

The trouble is, most Bitcoin mining hardware is still designed outside of the U.S. The industry has long been dominated by Antminer, a product line of China-based Bitmain Technologies with over 80% market share. Therefore, raising import tariffs on the required equipment severely impacts the industry's bottom line and the share prices of publicly listed Bitcoin mining firms in the country. The current environment is perhaps exemplified by Riot platforms selling bitcoin for the first time in 15 months this April to help finance operations — a break from its typical "hodl" strategy amid rising costs.

"As of today, we are facing a 12.6% tariff from units shipping from Asia to the U.S.," Luxor Technology Chief Operating Officer Ethan Vera recently told The Block. "We expected this to increase in July from 26.6% to 38.6% depending on country of origin. There is of course a chance that these tariffs are re-negotiated ahead of the 90-day pause."

Luxor is a Bitcoin mining technology and services company that operates mining pools, offers ASIC brokerage, custom firmware, and hashrate derivatives. Although the U.S. is its largest market, Luxor services mining companies in 32 countries. If the tariffs are implemented, the firm expects to see a reduction in demand from the U.S., and machines going to other countries.

Vera warned that if tariffs are enacted on the industry's supply chains in full, he expected the largest beneficiary to be Russia as the global mining hashpower landscape begins to reshape and U.S. growth decelerates. This is principally as Russian mining firms will be able to procure machines for less, and China-based capital will increasingly flow in that direction, Vera explained, adding that capital providers from the U.S. and Europe would begin investing more heavily in Canada, Northern Europe, Ethiopia, Brazil, Argentina, Chile, and Paraguay.

BitFuFu, a bitcoin mining company that offers cloud mining services and mining hardware hosting, told The Block that while the U.S. remains one of the most important regions for Bitcoin mining, thanks to its abundant energy resources and relatively supportive regulatory environment, emerging markets with access to low-cost energy — particularly in regions like parts of Africa — could start to benefit as miners look to diversify their operations and manage costs.

Contrasting short-term plans

When the tariffs were first announced, Luxor "raced" to get as many deals moving as possible, according to Vera. Since the pause, it has still been helping miners procure machines and import them into the U.S., just with less urgency than before and with little sign of supply chain disruption so far. However, the firm expects to see a large increase in volume during the first week of July ahead of the 90-day expiry, amid uncertainty on whether or not the window will be extended or tariffs implemented.

BitFuFu seems less concerned in the short term, confirming that its plan to increase investment in mining facilities and machines in the U.S. remains unchanged, despite the majority of its hardware being sourced from Southeast Asia, adding that the 90-day pause had no "material impact."

However, the company procured thousands of Antminer's latest S21 series machines ahead of the tariff announcements, not all of which have been energized, easing any short-term pressure as it also seeks to acquire additional operational sites to support hashrate expansion. "While tariff levels can vary, we are closely monitoring the situation and evaluating potential impacts," a spokesperson said.

"The cost of mining hardware, including tariffs, is just one component of the total mining costs," they added. "The cost of electricity is, by far, the largest cost for mining bitcoin, which is why we prioritize placing our machines at sites we control — so we can better manage returns. Currently, all our secured, self-operated U.S. sites are already running at full capacity. In addition, we generate the majority of our revenue from our cloud-mining business, where we lease hashrate to customers. This provides us with greater flexibility to manage our profitability across cycles."

Meanwhile, Bitmain spin-off Bitdeer, a bitcoin mining company that offers cloud mining, hosting, and infrastructure services, said it continues to navigate the evolving tariff landscape, particularly the newly imposed tariffs on mining hardware from Southeast Asia.

"During the 90-day pause, we are balancing short-term procurement strategies with long-term investments, including plans to introduce 'Made in USA' Sealminer machines in the latter half of this year," Bitdeer Head of Capital Markets and Strategic Initiatives Jeff LaBerge told The Block. He added that its global operations meant it can redirect machines to its self-mining facilities around the world to help mitigate any potential profitability risks.

Long-term tariff impact

Longer-term, Vera said Luxor was excited about the prospect of machines being produced in the U.S., but warned it could take years to fully onshore Bitcoin mining equipment manufacturing, echoing similar views to BitFuFu, who is seeing some manufacturers beginning to increase their U.S.-based production.

"We think that final assembly in the U.S. is possible today, and many manufacturers are doing it," Vera said. "However, the raw materials and components largely come from Asia so the machines will still end up carrying a higher cost. For a machine to be produced mostly from components sourced from the U.S., we expect it will take at least a few years before that is at scale."

"Tariff policies will inevitably raise the capital cost for purchasing mining rigs, which could temporarily curtail mining expansion in the U.S.," the BitFuFu spokesperson added. "However, mining economics are highly dynamic. If higher costs push less efficient miners out of the market, we could see a decrease in mining difficulty, which would help improve profit margins for the remaining operators."

Regarding the course of action Luxor would like to see the Trump administration take next, it is pushing for Bitcoin mining ASICs to receive an exemption similar to HTSUS 8471 on certain imports of computers, laptops and servers.

"We think it's important given the administration's campaign stance on helping the domestic industry and improving the mining industry in the U.S.," Vera said, adding that the firm is engaged with several groups advocating for fair treatment of Bitcoin miners in the U.S.

"We hope to see progress toward easing tariff pressures to vitalize the industry and attract more investment into the U.S. mining ecosystem, ultimately creating more growth opportunities," the BitFuFu spokesperson said. "For the time being, we are observing the administration's actions."

Meanwhile, Bitdeer's LaBerge argued that shifts in vendor preferences and sourcing strategies are already becoming evident. "Tariff policies are expected to accelerate domestic manufacturing efforts, reshape the distribution of global hashpower, and drive growth in emerging mining markets beyond North America," he said.

'No credible reports' of Bitcoin mining industry trying to game US Customs controls

Tariffs are not the only disruption to the U.S. Bitcoin mining industry in recent months. In February, mining sector news publication Blockspace reported that U.S. Customs and Border Protection was ramping up seizures of Bitcoin mining machines at ports of entry, citing documents including a notice of seizure of $5 million worth of goods from the Federal Communications Commission requesting the CBP to requisition MicroBT and Canaan units.

The U.S. Customs and Border Patrol began seizing Bitmain products last year because they contain chips from the now trade-restricted company, Sophgo. However, the exact motivation for expanding the order to include MicroBT and Canaan products, especially given that Canaan is a listed stock in the U.S. and MicroBT has a manufacturing pipeline in the country, was unclear. 

Meanwhile, amid recent allegations that some Bitcoin mining firms were increasingly underreporting ASIC shipment values to game U.S. customs following Trump's tariff announcements, Bitdeer's LaBerge played down the likelihood.

"On CBP reporting, as a Nasdaq-listed company, Bitdeer has always maintained strict compliance with all applicable laws and regulations, including customs import and export requirements," he said. "To our knowledge, neither Bitdeer nor any of our partners have engaged in such practices. We have not encountered any credible reports of others doing so either."