(Bloomberg) — Last year on the campaign trail, Donald Trump promised to be a champion of the Bitcoin mining industry in the US. Yet as American crypto miners begin to release their first quarterly earnings reports since Trump returned to the White House, it’s clear the group is struggling.
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Seven of the eight biggest publicly traded miners that are based in the US are expected to post a loss when they report first-quarter results, according to analysts’ estimates compiled by Bloomberg. The financial struggles come even after Bitcoin reached a record above $109,000 in January, and its price in the quarter averaged about 75% higher than it was in the first quarter of 2024.
Increased competition and tariffs weighed on the companies, which saw a compression in profit margins and growing uncertainty around expanding operations. The retreat in the broader stock market from the highs reached just after Trump’s election victory also prompted more miners to revert to debt financing instead of depending on raising cash from share sales.
Mining difficulty, a measure of computing power used to mine Bitcoin, broke record highs in the past months, indicating there has been more competition for the fixed amount of Bitcoin periodically released by the original blockchain. In the meantime, mining revenue has been in decline with energy price hikes in some states in the US during the same period of time.
“This is going to be an interesting quarter for the Bitcoin miners and perhaps a difficult one over the past few months.” said Brian Dobson, managing director for Disruptive Technology Equity Research at the brokerage firm Clear Street. “We will see margin compression and lower revenues from Bitcoin mining due to that higher global difficulty rate.”
Adjusted net income for the eight US miners fell by almost $1.3 billion in the first quarter from the same period in the previous year, according to analysts’ estimates compiled by Bloomberg. The group collectively is estimated to have swung to a loss of $190 million, versus adjusted net income of $1.1 billion in the first quarter of 2024. Among the eight, CleanSpark Inc. is the only miner that analysts expect to post a profit in the latest quarter.
Riot Platforms Inc., one of the biggest US public miners by revenue, is expected to report a quarterly loss and a decline in revenue later Thursday, according to analysts estimates.
The fierce competition is due in part to the deployment of Bitcoin mining machines that companies rushed to purchase in late 2024 when Bitcoin prices skyrocketed thanks to Trump’s pro-crypto stance. Such machines are specialized computers mostly manufactured in Asia, which is a major cost for mining operations with the companies raising billions of dollars to make the purchases.
The more computing power a miner can generate, the more likely it will be the first to successfully process a block of data on the Bitcoin network and win the rewards in the form of the token.
“When Bitcoin started to rally in November, we didn’t see an immediate corresponding move to a much higher level of global hash but we are seeing that now,” Dobson said. Hash refers to an indicator of the amount of computing power used to mint the cryptocurrency.
Growth in international mining operations, including those from Russia and China, have also intensified the competition, said Ethan Vera, chief operating officer at crypto mining services provider Luxor Technology.
Tariffs on the machines, some of which are made in Malaysia, are set to see much higher levels. “If that goes up more, it will be very detrimental, return profiles and growth forecasts can be hindered from that,” Vera said. “With tariffs coming in, I think everyone outside the US will benefit from that.”
The US-listed crypto miners are facing more uncertainty in terms of their expansion plans given the rising cost of machines and highly unpredictable tariff policy in the near future. The US miners also saw delays in shipment due to heavy inspection at the border early this year with the US Commerce Department’s blacklisting of the largest supplier, Beijing-based Bitmain’s artificial-intelligence affiliate Xiamen Sophgo Technologies Ltd., in January.
“The management teams are hesitant to develop a multi-year strategy based on what tariffs look like today when they realize that three months from now we could have a very different conversation on what the tariffs would look like,” Dobson said.
Bitcoin miners are also facing more difficulty in raising capital from the stock market, which has been the main source of financing for most of the public miners. The energy-intensive mining process requires large amounts of capital to purchase machines, build out data centers and pay electricity bills which can be in tens of millions of dollars.
Public mining companies have used at-the-market offerings to raise billions of dollars but some of them are turning to debt instruments such as fixed-income securities or credit facilities for liquidity. MARA Holdings Inc., Riot and CleanSpark have issued convertible bonds with the latter two recently setting up and expanding credit facilities, respectively.
“I think the big public companies don’t want to sell shares in the current market, this is an expensive way for them to raise capital, whereas the debit instruments are just lower-cost capital,” Vera said.
Bitcoin miners have been dealing with another blow since last April. A code update cut the Bitcoin rewards, which has been the main revenue stream for miners, by 50%. Called the halving, the preprogrammed event is designed to maintain the hard cap of 21 million Bitcoin by reducing that supply every four years.
While Trump promised to make every Bitcoin in the US, the miners have been mainly grappling with the side effects of his policies, with tariffs hiking the cost of mining rigs while spurring overseas mining operations, and a stock market selloff that has affected their ability to raise capital.
“In terms of the tariffs, I don’t think Trump has Bitcoin mining as his number one priority to focus on,” Vera said. “The trade war, for him, is the most important thing.”
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