Luxor Technology, a mining technology company, expects that Russian mining will become the main beneficiary of US President Donald Trump's trade duties if they fully extend to the supply chain of mining equipment. Luxor's chief operating Officer, Ethan Vera, told The Block about this.

(Ethan Vera)

Luxor Technology is a company dedicated to mining technologies and services. It manages mining pools and offers custom software. The United States is Luxor's largest market, but the company also provides services to mining companies in 32 countries. If tariffs are imposed, Luxor expects lower demand from the United States and the redirection of equipment supplies to other countries.

Vera said that the company is facing a 12.6% tariff on devices shipped from Asia to the United States, and expects an increase in July to 26.6–38.6%, depending on the country of origin.

If tariffs are imposed on all supply chains of the mining industry, then, according to Vera, Russia will benefit the most, as the global mining landscape will begin to change, and the growth of the industry in the United States will slow down.

This is mainly due to the fact that Russian mining companies will be able to purchase equipment at lower prices, and capital from China will increasingly be directed in this direction, Vera explained.

However, he added that unlike the Chinese, investors from the United States and Europe will begin to invest more actively in the mining sector in Canada, Northern Europe, Ethiopia, Brazil, Argentina, Chile and Paraguay.

On the other hand, not only miners, but also equipment manufacturers may be affected by US trade duties. Some of them, such as Bitmain and Bitdeer, have started opening production lines in America, trying to adapt to the situation.

Not only pricing plans

In June 2024, Donald Trump announced his desire to create conditions for mining the remaining bitcoins in the United States. However, the choice of mining location is mainly related to access to cheap electricity, which is why even American mining companies are developing business outside the country.

The mining company BitFuFu, which offers cloud mining services and hosting for equipment, said that the cost of mining devices, including new fees, is just one component of the total cost of mining cryptocurrencies.

BitFuFu, which leases computing power for most of its income, calls the cost of electricity the largest expense item. Therefore, the company places its devices on autonomous sites controlled by it.

According to a report by the research company CoinShares, bitcoin mining in the United States has significantly increased in price. In the fourth quarter of 2024, the largest miners spent an average of $82,162 to produce one bitcoin. A quarter earlier, the average cash cost was $55,950.

The issue of electricity used by miners is being raised by the US authorities. In late April, U.S. Commerce Secretary Howard Lutnick called on bitcoin mining companies to open new data centers near gas fields, build power plants, and use associated gas to generate the energy needed to mine bitcoin.