Bitcoin Miners Face Growing Pressure From Hardware Tariffs, ETF Demand: Bitwise

With import duties reaching 46% and capital being funneled into low-risk Bitcoin assets via ETFs, miners are facing increasing constraints on both costs and funding.

According to a new report from Bitwise, Bitcoin (BTC) miners in the US are facing two major challenges: increasing equipment costs due to import duties and growing competition from financial instruments such as ETFs.

In the report, Bitwise head of research Andre Dragos and analyst Ayush Tripathi point out that an estimated 40% of the world’s hashrate is controlled by U.S. mining companies, and the industry “faces taxes ranging from 24% to 46% on imported mining equipment from Vietnam, Thailand, and Malaysia.” These duties come at a time when the price of hashrate, a key indicator of profitability for miners, is “at historically low levels,” the report says.

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Investor interest is also shifting elsewhere. Analysts note that spot cryptocurrency exchange-traded funds and corporate treasuries such as Strategy and Metaplanet are absorbing investor demand, and bitcoin miners “are currently facing stiff competition in the capital markets.”

“These companies can accumulate BTC using low-priced equity or convertible debt, giving investors instant access to price growth without the operational risks associated with mining. This puts pressure on miners, who must fund significant initial capital investments, navigate an uncertain regulatory environment, and wait months or even years for their investments to begin generating returns.”

Bitwise

However, some companies are adapting to the new conditions. For example, Bitmain-backed crypto miner Bitfufu is considering rerouting its machines to Ethiopia, while Bitdeer is focusing on Norway and Bhutan.

Riot and CleanSpark, two U.S.-based miners, were able to mitigate the initial impact of the tariffs by accelerating shipments ahead of schedule, Bitwise notes. However, despite these measures, the outlook remains grim, as miners are clearly “preparing for even more significant problems,” Bitwise concluded.

Read more: Bitcoin Miner HIVE Digital Shares Up 2% After Completing 100MW Facility in Paraguay

Source: cryptonews.net