Bitcoin mining has been undergoing significant changes as the network’s hashrate reached a new all-time high (ATH) of 850 million terahashes per second (TH/s) in March 2025. While this surge indicates a stronger, more secure network, Bitcoin miners face mounting challenges, particularly rising operational costs and new tariffs on hardware imports. These factors could reshape the industry and threaten the profitability of miners, particularly in regions like the US.

Hashrate Surge and Mining Security

Bitcoin’s hashrate represents the total computing power used to secure the blockchain and validate transactions. As the hashrate rises, Bitcoin becomes more secure, harder to attack, and increasingly valuable. This surge to 850 million TH/s signals that more miners are joining the network, bolstering Bitcoin’s security and making the network more robust against attacks.

Thomas Jeegers, CFO & COO of Relai, commented, “Each time the network gets stronger, Bitcoin becomes harder to attack, harder to ignore, and more justified in commanding a higher valuation.” This reflects a growing belief that Bitcoin’s value will continue to rise as the network’s security improves.

Rising Mining Costs

Despite the significant increase in the hashrate, Bitcoin miners are not seeing a proportional rise in profits. The cost of mining one Bitcoin has doubled since early 2024, now reaching around $87,000. This surge in costs is primarily driven by higher electricity prices and the increasing cost of Application-Specific Integrated Circuits (ASICs), the specialized hardware used in Bitcoin mining.

With the price of Bitcoin fluctuating, many miners are at risk of operating at a loss unless they can optimize their operations. This is particularly challenging for smaller miners, who often lack the scale advantages or access to cheaper electricity enjoyed by larger mining firms. As mining becomes more costly, only the most efficient miners with access to lower operational costs are likely to remain profitable.

Tariffs and Dependence on Chinese Hardware

Another significant challenge for Bitcoin miners is the growing reliance on Chinese mining hardware manufacturers, particularly Bitmain, which produces around 59% to 76% of the ASIC hardware used in Bitcoin mining. Despite global efforts to diversify hardware suppliers, Bitmain’s dominance remains a major concern.

New tariffs on Chinese imports, especially in the US, are increasing the cost of mining equipment. As reported by CoinMetrics, US-based miners are facing delays in receiving Bitmain shipments due to stricter customs controls. The US has imposed duties of up to 27.6% on Chinese mining hardware since 2018, but recent measures have intensified the regulatory pressures, raising the cost of equipment even further.

These tariffs and supply chain disruptions threaten to increase operational costs for US-based mining operations. Smaller miners who depend on cost-effective equipment may find themselves priced out of the market, limiting the overall growth of the mining industry.

Strategic Responses to Challenges

In response to these challenges, some US-based companies are forming strategic partnerships. Hut 8 Corp., a major Bitcoin mining and high-performance computing firm, recently partnered with Eric Trump and Donald Trump Jr. to establish American Bitcoin Corp. This venture aims to become the largest and most efficient pure-play Bitcoin mining operation globally. The partnership highlights the growing interest from US institutional investors in the mining space, and the desire to build more efficient and self-reliant operations amid increasing regulatory and tariff pressures.

Conclusion

While Bitcoin’s 850 million TH/s hashrate is a strong indicator of the network’s security and growth, miners are facing significant challenges due to rising production costs and tariffs on hardware. These factors, coupled with the geopolitical dependencies on Chinese hardware manufacturers, could hinder the continued growth of the Bitcoin mining sector. Only the most efficient and well-funded operations will likely thrive in this increasingly competitive and cost-sensitive environment.