The Commercial dispute between the United States and China He climbed back under the government of Donald Trump and threatens to destabilize one of the most dynamic sectors of the digital economy: the cryptocurrency mining. Although the US concentrates between the 30% and 40% of global mining activityits hardware dependence manufactured in Asia – especially in China – leaves it in a vulnerable position in the hardening of tariffs.
The last chapter of this commercial war implied a 145% tariff increase for Chinese products and retaliation by the Asian giant with 125%rates. Although a 90 -day truce was established, the consequences are already felt in the markets. Bitcoin’s main mining companies suffered strong falls in their actions:
In some cases, stock market collapse already exceeds 50% since January.
An industry at risk: triple dependence on miners
The cryptocurrency mining activity is based on three fundamental pillars: the electricity costhe Bitcoin price and the equipment value. According to Carlos Escobedo, professor at the UPF Barcelona School of Management, “the miners resist the fluctuate of Bitcoin, but if the electrical cost or the equipment is triggered, the equation ceases to be profitable.”
The latter is key: 80% of specialized hardware (ASIC) comes from Chinese companies such as Bitmain, Microbt and Canaan. With additional tariffs, importing these equipment to the US becomes prohibitive. From Luxor Technologies, provider of the sector, they estimate that the American industry imports US $ 200 million annually in teams from Asiawhich will result in More than US $20 million in additional costs.
Latin America and Africa, in the sights of the miners
Faced with this new scenario, many miners in the US Evaluate transfer operations to abroadas confirmed by Erick Vera, head of business for Latin America in Luxor. The most considered regions are Latin America and Africamainly for their low energy costs.
“Tariffs represent an important financial burden. Many of our clients are considering expanding to countries where operating costs are lower,” said Vera.
The option to manufacture in the US, a slow and expensive solution
Chinese companies also seek to dodge tariffs diversifying their operations. Already in 2018, after Trump’s first tariffs, Bitmain began to move production towards Malaysia, Thailand and Indonesia. However, these countries were also reached by the new 10%rates.
Given this, some companies launched directly in the US Bitmain announced last December the opening of its own plant on American soil. Besides, Luxor closed an agreement for US $ 131 million with Microbtwhich already began to assemble equipment locally, according to Bloomberg.
Even so, specialists believe that the solution will not be immediate. “The ASICs are extremely complex. There is no other country that has the productive scale of China. Relocating factories or lifting new in the USA. It takes time and raises costs,” said Sanjay Gupta, from Auradine.
A key industry, in check
Cryptocurrency mining is not just a business: it is Blockchain ecosystem heart. Recent commercial tensions put their profitability and could Accelerate a global relocation process that favors emerging markets with competitive conditions.
For now, the next movements will depend on how relations between Washington and Beijing evolve. But the truth is that the era of “Bitcoin Made in USA” is, today more than ever, In review.
Source: Ambito
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