Latest news with #LuxorTechnology
Yahoo
3 days ago
- Business
- Yahoo
Trump's Asia tariffs takes a massive hit on Bitcoin miners
Trump's Asia tariffs takes a massive hit on Bitcoin miners originally appeared on TheStreet. As per the latest report by The Block, President Donald Trump's latest order on global tariffs seems to be becoming a pain in the neck for the Bitcoin mining community in the U.S. As the 90-day tariff pause deadline neared, Trump announced a slew of new global tariff rates on July 31. Among the worst-hit are the key centers of mining rig manufacturing in Southeast Asia. For those unfamiliar, crypto mining is the process of using high-tech hardware to validate and secure transactions on a blockchain network. Ethan Vera, the COO of a Bitcoin mining technology and services company, Luxor Technology, shared a document with The Block as per which the latest directive imposes 21.6% tariffs, including a 19% "reciprocal tariff," on imports of application-specific integrated circuits (ASICs) from Indonesia, Malaysia, and Thailand beginning Aug. are chips that are designed to execute a specific task extremely efficiently such as crypto mining, as opposed to general-purpose processors like central processing units (CPUs) or graphics processing units (GPUs). As per the report, U.S. tariffs on imports from China, a major hub of mining rig manufacturing, stand at a staggering 57.6%, which includes a 10% baseline reciprocal tariff and an additional country‑specific tariff of 20%. Anyway, the tariff pause deadline between the two countries is set to expire on Aug. 12, and there has been no breakthrough so far. While still lower than earlier rates, the current tariffs are significantly higher than the 2.6% tariffs on ASICs imported from the Southeast Asian countries before Trump's second term. However, Chinese machines even earlier used to face an additional 25% ad valorem said, "At 21.6% tariffs, the U.S. is now one of the least competitive jurisdictions to bring machines in, and miners are looking at Canada and other markets to expand too." Opportunity for domestic manufacturers However, the new trade conditions could also lead to a rise in the prices of U.S.-based used ASIC machines in the face of high tariffs on imported rigs, he explained. Though Luxor is excited about the production of mining rigs in the U.S., it warned fully onshoring the manufacturing could take years because most of the raw materials are still imported from Asia. The mining company expected the Trump administration to exempt the mining equipment from tariff hikes in order to encourage the domestic crypto industry. Trump's Asia tariffs takes a massive hit on Bitcoin miners first appeared on TheStreet on Aug 6, 2025 This story was originally reported by TheStreet on Aug 6, 2025, where it first appeared.
WIRED
4 days ago
- Business
- WIRED
Charter Planes and Bidding Wars: How Bitcoin Miners Raced to Beat Trump's Tariffs
Aug 6, 2025 7:00 AM When US president Donald Trump announced sweeping tariff hikes in April, he set in motion a seven-day rush to bring goods into the country. Bitcoin miners elbowed their way to the front of the queue. Photo-Illustration:Twelve minutes after midnight on April 8, a Boeing 777-300ER barreled down a runway at Singapore Changi Airport. In its belly, it carried precious cargo: 3,000 kilograms of specialized bitcoin mining equipment bound urgently for New York. As the plane took to the sky, staff at US-based Luxor Technology could begin to relax. The company, which trades bitcoin mining hardware and provides related software services, was importing the equipment on behalf of a client. The flight's departure from Singapore was the result of a seven-day scramble to arrange transport for the $1.3 million shipment. A week earlier, on April 2, US president Donald Trump had announced sweeping tariff hikes on goods from 57 countries, effective April 9. Luxor says it had expected to pay a 2.6 percent import duty, but suddenly, its shipment—which originated in Indonesia—stood to incur a 32 percent levy amounting to hundreds of thousands of dollars. An untold number of businesses in all sorts of industries found themselves in the same position. Although Trump's tariff deadline has since been repeatedly delayed, most recently to August 7, the initial announcement set in motion an almighty scrap spanning practically every time zone and every link in the supply chain. To clear US customs before the April 9 deadline, importers fought over whose goods would be released earliest by manufacturers, trucks and barges to ferry cargo from warehouses to airports, passage through airport security, and limited airfreight capacity, sources say. The sources that spoke to WIRED for this story largely declined to name their clients, suppliers, or supply chain partners for confidentiality reasons. When the Luxor cargo left the tarmac in Singapore in time to make the cutoff, it felt to those that worked on the shipment like a narrow escape. 'It was kind of like one of those movies where you get on the plane and everyone starts clapping,' says Ethan Vera, chief operating officer at Luxor. 'The team was celebrating: The flight had taken off; the machines were on it.' Tariff hikes are costly to all importers, but the US bitcoin mining industry is both particularly import-dependent and in the midst of a period of instability that already threatens to undermine profitability. The bitcoin mining hardware market is an oligopoly dominated by two Chinese companies—Bitmain and MicroBT—which together account for an estimated 97 percent of sales. After the US imposed steep tariffs on Chinese goods during Trump's first term, those firms moved a proportion of manufacturing to Malaysia, Thailand, and Indonesia. But under Trump's initial tariff announcement, these countries faced tariffs between 24 and 36 percent, too. Meanwhile, a vicious combination of other factors—steep competition, a slump in transaction fees, diminishing bitcoin rewards, surging energy demand, and so on—have strangled margins for US-based mining companies. Under these conditions, says Vera, the additional tariff cost threatens to undermine the economics of less well-capitalized bitcoin mining operations. 'On the high end, adding [more than 30 percent] to your capital expenditure really destroys unit economics for mining,' he says. When Trump announced the hikes, mining companies whose pending hardware orders were not yet ready for collection had no choice but to brace for the additional cost or place shipments on hold in the hope that negotiations between the US and its trading partners might yield less punitive rates. But for companies whose machines stood ready, the race against the clock began. On April 2, Vera was sitting in a hospital unit in Uruguay, he says, an IV bag feeding painkillers into his system, after damaging a knee ligament playing soccer earlier in the day. Simultaneously, he says, he was taking a work call. Vera and two other Luxor staff members—Lauren Lin, head of hardware, and Nicole Caldwell, head of shipping—convened in a virtual 'war room' to form a response to the tariffs and divide up the most urgent tasks. 'I didn't even know it was possible to raise tariffs in, like, a two-day period,' says Vera. 'It's really hard to conduct business like that—to have confidence investing in a system that can change rules that fast.' Soon, Lin had identified two Luxor shipments ready for collection: the $1.3 million order from Indonesia and, for a separate client, a $12 million order split between warehouses in Malaysia and Thailand. If the company could ferry the shipments through US customs before April 5, it would sidestep all tariff hikes; and failing that, if it could beat the April 9 deadline, the shipments would be subject to a blanket 10 percent import duty instead of the full proposed rates. 'It was a very urgent situation,' says Lin. Typical of global supply chains, whose elaborate theater is normally concealed from view, transporting bitcoin mining hardware across the world involves many steps and requires coordination between many parties. After manufacturing, hardware is usually held at the factory or a third-party warehouse. From there, a freight forwarding company hired by the importer can arrange delivery of the machines by barge, truck, or plane to the nearest international airport. The freight forwarder would then strike a price with an air carrier to ferry the cargo to its final destination, with the importer's approval. Once the cargo begins the final leg of its journey, the importer may begin the customs process before ultimately releasing the hardware to the end buyer: the bitcoin mining company. It takes time for mining machines to make their way through this funnel, particularly during a period of heightened demand. 'It's all very finely tuned,' says Christopher Berschel, president at freight forwarding company Sealion Cargo, whose clients include multiple bitcoin mining hardware importers. 'The minute you have a disruption or a peak in demand, you find that there are not enough trucks, not enough space in terminals, not enough aircraft, not enough people to unload the aircraft.' But in April, importers found themselves with just days to play with. 'There was this very clear tariff clock—the deadline whereby landing one hour or taking off one hour later just made a massive difference,' says Berschel. 'That's unique.' For companies importing goods from Southeast Asia, like Luxor, the timing of Trump's announcement was particularly unhelpful, coinciding with Eid, the public holiday celebrated at the end of Ramadan. Initially, Luxor's attempts to arrange collection went unanswered. In some cases, says Berschel, 'factories had lines of trucks in front of them.' But eventually, in light of the circumstances, the warehouse agreed to prepare the hardware shipment. 'We had to call a lot of people on the supply chain side to allow us to pick up,' says Lin. To arrange a collection at a few days' notice, in the middle of a public holiday, would normally be 'almost impossible,' she says. 'That never happened before this news broke.' On April 3, Luxor began to bid for a charter plane for the $12 million order, which was large enough to fill a jet. Lin set up camp at the client's office, so she could directly relay messages from the freight forwarder, which was negotiating with air carriers. As the day progressed, the quotes for charter planes continued to rise. Each time Luxor's client lodged a bid, another party came in over the top, and the negotiation cycle started over. 'We had a very short window to make a decision. I don't think it's the norm to need to make a multimillion-dollar decision within such a short time window,' says Lin. By midnight, Lin had ironed out a final $1.76 million bid, she says. But by the morning of April 4, she claims, the bid had been gazumped—prices had risen to $3.5 million. According to Sealion Cargo, prices for some types of air freight peaked at 10 times the regular rate in the first week of April. Luxor and its client gave up on the plan to charter a plane. Meanwhile, at the cargo terminals of some major airports in Southeast Asia, things had begun to unravel. 'It was absolute chaos,' says Berschel, who traveled to Thailand, Malaysia, and Singapore to monitor the progress of shipments. 'There was so much cargo at the terminals, to actually get cargo through the terminals, through the x-ray scanners, and by the side of the aircraft was a challenge in itself,' he says. At Suvarnabhumi Airport in Bangkok, Berschel recalls, the buildup of pallets had created a logjam. With little available dock space, truckers were hauling boxes from their vehicles toward the airport terminal. Police officers were on hand to control the swelling crowds. 'It was kind of like a concert, but a concert for cargo,' says Berschel. In the disorder, even importers that had managed to secure passage on departing planes risked missing the opportunity to load their cargo as they struggled to get it past the logjam to the aircraft. 'The chance of missing an aircraft, missing a loading window,' says Berschel. 'There were so many situations where we were down to literally minutes.' Airports of Thailand, which manages Suvarnabhumi Airport, did not respond to a request for comment. On April 8, Vlad Siniavsky sat in his office in Montreal awaiting the arrival of his final pieces of cargo and calculating how much money he had lost. Siniavsky is the founder of AsicXchange, another bitcoin mining hardware trading company caught in the tariff scramble. AsicXchange claims to have ended up paying $800,000 in shipping costs—more than three times the regular amount, according to Siniavsky—to fly $6 million worth of bitcoin mining hardware into the US before the April 9 deadline. The company had split around 60 pallets of equipment across planes departing from Malaysia, Indonesia, and Thailand. The bidding process, says Siniavsky, 'was just a free-for-all.' To avoid denting its relationship with the bitcoin mining company purchasing the machines, AsicXchange agreed to cover the uplift in shipping costs, which meant taking a $100,000 loss on the deal. 'A lot of money was lost in the company because of this situation,' says Siniavsky. Luxor was not required to bear the additional shipping and tariff costs associated with the $12 million order—which eventually arrived in the US in batches across April and May—under the terms of its sales agreement. But the company did cover the much-elevated cost to ship the separate $1.3 million order from Singapore. 'It ended up costing us a lot of money, obviously,' says Vera. As it turned out, importers had wasted their efforts. On April 9, Trump announced a 90-day pause on the tariff hikes, which have since been delayed a further two times. The president's equivocations have given rise to a joke at his expense: TACO, short for Trump always chickens out. The new tariff regime is set to take effect on August 7. Under the latest rates, outlined in an executive order on July 31, imports from Indonesia, Thailand, and Malaysia are set to incur a 19 percent import duty—slightly lower than previously threatened. Ahead of the August 7 deadline, there has been almost none of the chaos that reigned in the period after the initial tariff announcement, sources say, because importers have had plenty of time to bring goods into the country piecemeal. 'At the time, [the system] wasn't ready for it … Everyone kind of got caught off-guard,' says Vera. 'There's more preparedness now, in terms of pushing over shipping lanes and getting aircraft to Southeast Asia.' Among importers, the satisfaction at having overcome the thorny logistics and outrun the deadline is cut with resentment at having been forced to pay over the odds and suffer the unnecessary strain. 'It was probably one of the most stressful things in my career,' says Siniavsky. 'We're super proud of what we did,' says Berschel. But 'in the end, that was all for naught.'
Yahoo
17-04-2025
- Business
- Yahoo
Bitcoin miners in U.S. fear wipeout as 36% tariffs threaten to ‘destroy' thriving industry
When China cracked down on the crypto industry in 2021, many Bitcoin miners set up shop in the U.S. instead. The move paid off as a mix of cheap energy and deep capital markets saw the U.S. become the world's leader in Bitcoin production and, following the election of pro-crypto President Donald Trump, American miners' future seemed brighter than ever. In April, all of that changed. That's because, even as the U.S. took the lead in production, American miners continued to rely heavily on machines from Asia—machines that are now subject to hefty tariffs as high as 36% as Trump aims to choke off overseas imports. Most Bitcoin mining machines in the U.S. are produced in Southeast Asia in countries like Thailand, Malaysia and Indonesia. Under Trump's tariff policy—which was set to go into effect on April 9 but has since been put on a 90-day pause—these countries face tariffs ranging from 24% to 36%. In the meantime, a general 10% rate remains in place. Mining machine marketplace Luxor Technology imports many of its machines from Thailand, the company's chief operating officer Ethan Vera told Fortune. The proposed 36% tariff on those machines would 'destroy' his company's return on investment, he says. View this interactive chart on Most Bitcoin mining in the U.S. occurs in Georgia, with Texas and New York following closely behind. Those operations are costly for mining companies which spend most of their money on updating machines and the electricity it takes to operate them. One of the industry's largest players, Marathon Digital, owns around 400,000 Bitcoin miners and produced 9,430 Bitcoins last year, worth more than $796 million at current prices. Adding 36% to the current price of mining machines, which for top-of-the-line units is between $4,000 and $5,000, would make the industry's narrow margins even more narrow, Vera said. 'Those machines are never going to return the capital if there's another 36% on,' he said. 'The margins are just too tight.' Trump made many promises to the crypto industry on the campaign trail, including his pledge to ensure that all remaining Bitcoins are mined in the U.S. His election victory in turn set off a wave of optimism about crypto in the U.S. more broadly—one that included President Trump's two oldest sons launching a mining venture of their own called American Bitcoin. However, the now-president's dizzying tariff policy may be having the opposite effect. As investors anticipate the impacts of hefty tariffs on the industry, publicly traded mining companies are feeling the pain. While the S&P 500 is down 8% since April 2, when Trump initially announced his sweeping tariff plan, an index that tracks the price of shares in the largest mining companies has fallen 12%. Bitcoin mining companies in the U.S. are using the 90-day reprieve to assess their options. Some companies have postponed their long-term contracts with manufacturers while others are rushing to import as many machines as possible before the higher tariffs go into effect in July. The economic uncertainty has even triggered a push to explore expanding outside of the U.S, Taras Kulyk, CEO of Synteq Digital, an official U.S. distributor for leading mining manufacturer Bitmain, told Fortune. 'I've already gotten three mandates from some of our largest partners to start looking for sites for immediate purchase and deployment outside of the U.S,' he said. Even if the tariffs are short-lived, Kulyk says that the unpredictability of Trump's policies is making his clients uneasy. 'If you can't set a clear agenda or policy, you're not going to attract the hundreds of billions of dollars you will need to build a new manufacturing base,' he said. Other companies have remained steadfast in their commitment to expanding within the U.S, despite the uncertainty. Vishnu Mackenchery, global logistics and project manager at Compass Mining, told Fortune that his company plans to continue mining in America. But, in order to do so, his company needs to see a resolution on tariffs before it can continue importing machines, he said. 'We want to continue building here in the U.S,' he said. 'So to continue down that path, we hope that a resolution comes soon regarding the tariffs.' This story was originally featured on Sign in to access your portfolio
Yahoo
03-04-2025
- Business
- Yahoo
Luxor's Aaron Forster on Bitcoin Mining's Growing Sophistication
Luxor Technology wants to make bitcoin mining easier. That's why the firm has rolled out a panoply of products (mining pools, hashrate derivatives, data analytics, ASIC brokerage) to help bitcoin miners, large and small, develop their operations. Aaron Forster, the company's director of business development, joined in October 2021, and has seen the team grow from roughly 15 to 85 people in the span of three and a half years. Forster worked a decade in the Canadian energy sector before coming to bitcoin mining, which is one of the reasons why he'll be speaking about the future of mining in Canada and the U.S. at the BTC & Mining Summit at Consensus this year, May 14-15. In the lead-up to the event, Forster shared with CoinDesk his thoughts on bitcoin miners turning to artificial intelligence, the growing sophistication of the mining industry, and how Luxor's products enable miners to hedge various forms of risk. This interview has been condensed and edited for clarity. Mining pools allow miners to combine their computational resources to have higher chances of receiving bitcoin block rewards. Can you explain to us how Luxor's mining pools work? Aaron Forster: Mining pools are basically aggregators that reduce the variance of solo mining. When you look at solo mining, it's very lottery-esque, meaning that you could be plugging your machines in and you might hit block rewards tomorrow — or you might hit it 100 years from now. But you're still paying for energy during that time. At a small scale, it's not a big deal, as you scale that up and create a business around it. The most common kind of mining pool is PPLNS, which means Pay-Per-Last-N-Shares. Basically, that means the miner does not get paid unless that mining pool hits the block. That's also due to luck variance, so it's no different from that solo miner's situation. However, that creates revenue volatility for those large industrial miners. So we're seeing the emergence of what we call Full-Pay-Per-Share, or FPPS, and that's Luxor is operating for our bitcoin pool. With FPPS, regardless of whether we find a block or not, we're still paying our miners their revenue based on the number of shares they've submitted to the pool. That gives revenue certainty to miners, assuming hashprice stays the same. We've effectively become an insurance provider. The problem is that you need a very deep and strong balance sheet to support that model, because while we've reduced the variance for miners, that risk is now put on us. So we need to plan for that. But it can be calculated over a long enough period of time. We have different partners in that regard, so that we don't bear the full risk from our balance sheet. Tell me about your ASIC brokerage business. We've become one of the leading hardware suppliers on the secondary market. Primarily within North America, but we've shipped to 35+ countries. We deal with everybody from public companies to private companies, institutions to retail. We're primarily a broker, meaning we match buyer and seller, mostly on the secondary market. Sometimes we do interact with ASIC manufacturers, and in certain cases we do take principal positions, meaning we use money from our balance sheet to purchase ASICs and then resell them on the secondary market. But the majority of our volume comes from matching buyers and sellers. Luxor also launched the first hashrate futures contracts. We're trying to push the Bitcoin mining space forward. We're a hashrate marketplace, depending on how you look at our mining pools, and we wanted to take a big leap and take hashrate to the TradFi world. We wanted to create a tool that allows investors to take a position on hashprice without effectively owning mining equipment. Hashprice is, you know, the hourly or daily revenue that miners get, and that fluctuates a lot. For some people it's about hedging, for others it's speculation. We're creating a tool for miners to sell their hashrate forward and use it as a basic collateral or a way to finance growth. We said, 'Let's allow miners to basically sell forward hashrate, receive bitcoin upfront, and then they can take that and do whatever they need to do with it, whether it's purchase ASICs or expand their mining operations.' It's basically the collateralization of hashrate. So they're obligated to send us X amount of hashrate per month for the length of the contract. Before that, they'll receive a certain amount of bitcoin upfront. There's a market imbalance between buyers and sellers. We have a lot of buyers, meaning people and institutions wanting to earn yield on their bitcoin. What you're lending your bitcoin at is effectively your interest rate. However, you could also look at it like you're purchasing that hashrate at a discount. That's important for institutions or folks that don't want physical exposure to bitcoin mining, but want exposure to hash price or hashrate. They can do that synthetically through purchasing bitcoin and putting it into our market, effectively lending that out, earning a yield, and purchasing that hashrate at a discount. What do you find most exciting about bitcoin mining at the moment? The acceptance and natural progression of our industry into other markets. We can't ignore the AI HPC transition. Instead of building these mega mines that are just massive buildings with power-dense bitcoin mining operations, you're starting to see large miners turning into power infrastructure providers for artificial intelligence. Using bitcoin mining as a stepping stone to a larger, more capital intensive industry like AI is exciting to me, because it kind of gives us a bit more acceptance, because we're coming at it from a completely different angle. I think the biggest example is the Core Scientific-CoreWeave deal structure, how they've kind of merged those two businesses together. They're complimentary to each other. And that's really exciting. When you look at our own product roadmap, we have no choice but to follow a similar roadmap to bitcoin miners. A lot of the products that we built for the mining industry are analogous to what is needed at a different level for AI. Mind you, it's a lot simpler in our industry than in AI. We're our first step into the HPC space, and it's still very early days there. Sign in to access your portfolio
Bloomberg
03-04-2025
- Business
- Bloomberg
Tariffs Disrupt Bitcoin Mining Supply Chain Rooted in Asia
Lauren Lin is in a hurry. She has less than 48 hours to ship about 5,600 Bitcoin mining machines from Thailand to the US before tariffs imposed on the Southeast Asian country by President Donald Trump kick in. 'Today we're just scrambling,' said Lin, head of hardware at Luxor Technology, a Bitcoin mining software and services company. 'Ideally we can charter a flight and get machines over — just trying to be as creative as possible to get these machines out.'
