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The American bitcoin mining industry is going through a critical period. Between outdated tax rules and increasing economic pressure, miners are now demanding fair treatment compared to their traditional commodity counterparts.
In Brief
- Bitcoin miners face immediate taxation upon extraction and then again upon sale, unlike gold producers who pay only once.
- This tax pressure drives companies to massive liquidation: 40% of their production sold in March 2025, a record since October 2024.
- US tariffs (up to 54% on Chinese equipment) and outdated tax rules are financially strangling the national mining sector.
A two-speed tax system that penalizes Bitcoin
Beau Turner, CEO of Abundant Mines, points out a striking tax anomaly. Where a gold producer pays tax only upon sale, Bitcoin miners face immediate taxation from the moment of extraction.
“The IRS treats mined coins as regular income immediately,” he explains in an interview with TheStreet Roundtable. This approach creates artificial pressure on an already volatile market.
This double taxation, income at mining then capital gains at sale, mechanically pushes operators toward premature liquidations.
The March 2025 figures perfectly illustrate this phenomenon: the top 15 publicly traded companies sold more than 40% of their fresh production, marking the largest wave of liquidation since October 2024.
CleanSpark embodies this new reality by officially adopting a “self-financed” model based on regular sales. This strategy, dictated by the current tax constraints, breaks with the strategic accumulation seen after the last halving.
Turner sums up the situation:
If you’ve got a tax bill but you haven’t sold your coin yet, you might have to sell it just to pay the tax
The recent evolution of the Financial Accounting Standards Board (FASB), allowing the use of fair value accounting for bitcoin, suggests a regulatory approach change. This decision, benefiting especially Michael Saylor’s Strategy, could foreshadow a much-awaited tax harmonization by the mining industry.
External challenges that amplify the crisis
Beyond tax issues, the American industry is facing an economic storm. The Trump administration’s tariff policies are hitting imports of Asian equipment hard.
Trump imposed tariffs of over 34% on China, the main supplier of mining equipment. Other Asian countries are not spared from increases: 24% to 37% according to sources.
With duties rising from 25% to 54% for Chinese machines, and similar increases for countries like Thailand or Malaysia, equipment costs are exploding by 22 to 36%.
The problem? Chinese companies control 70% to 80% of the global mining equipment market. It is impossible to do without overnight. This dependency turns each tariff increase into a financial disaster.
Mining company stocks immediately dropped after Trump’s announcement, and some experts predict that American mining could become “economically unfeasible.”
Faced with this double pressure, some players are trying to adapt. Bitmain and Whatsminer are accelerating their US presence to bypass tariffs. Other American miners are even considering relocation to countries without tariffs.
This brain and capital drain could redistribute global computing power, weakening American dominance in this strategic sector.
In short, the American bitcoin mining industry is at a decisive crossroads. Outdated tax rules combined with trade tensions create a hostile environment pushing players toward exile or forced liquidation.
Beau Turner sums up the situation without detours. His request is simple:
We’re not asking for special treatment, just to be treated like any other commodity business.
A reform in this regard could transform market dynamics, reduce forced sales… and stabilize, perhaps, the bitcoin price.
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Passionné par le Bitcoin, j’aime explorer les méandres de la blockchain et des cryptos et je partage mes découvertes avec la communauté. Mon rêve est de vivre dans un monde où la vie privée et la liberté financière sont garanties pour tous, et je crois fermement que Bitcoin est l’outil qui peut rendre cela possible.
DISCLAIMER
The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.
