Trump’s Mining Company ABTC Exchanges BTC for Bitmain Mining Machines, Involving US-China Tariff and Origin Disputes
Trump Family Mine Company American Bitcoin Company (ABTC) Orders Over 17,000 Miners from Bitmain
On August 14, the Trump family mining enterprise American Bitcoin Company (ABTC) made a significant purchase of 17,000 mining machines from the Chinese manufacturer Bitmain, using 2,234 Bitcoins (BTC). This transaction is not merely a hardware purchase; it also involves issues related to the manufacturing location amid US-China trade frictions, import tariff disputes, and the current conservative investment attitude of institutions towards mining hardware.
ABTC Uses BTC as Collateral for Mining Machines, Remaining Units to be Secured Soon
According to reports, ABTC pledged 2,234 BTC as collateral based on the “On-Rack Sales Agreement” signed with Bitmain, along with a previously paid deposit of $46 million, to pay for an order of mining machines with a total hash rate of 14 EH/s. The BTC was calculated at a fixed price as agreed by both parties and has a redemption period of 24 months.
This order is part of a larger procurement contract that allows for the purchase of up to 17,280 mining machines (total hash rate of 14.86 EH/s), with a total value reaching $319.5 million, excluding tariffs and import fees.
According to the Agreement, ABTC Must Acquire Remaining Mining Machines Within Two Months
ABTC has the option to pay in cash or use more BTC as collateral for the remaining mining machines that need to be secured within the next two months.
Just Purchased 1,726 BTC, Now Using 2,234 BTC as Collateral
It is noteworthy that ABTC spent $205.6 million to purchase 1,726 BTC at an average price of $119,120 each between July 1 and August 6.
ABTC’s major shareholder is Canadian miner Hut 8. After completing this acquisition and collateral arrangement, the company not only holds more BTC reserves but is also prepared to welcome a new wave of mining equipment deployment.
Mining Equipment’s Country of Origin Becomes a Tariff Minefield, Industry Responds Actively
This transaction also highlights the structural changes occurring in the mining equipment market. Recently, several US-listed mining companies, such as IREN and CleanSpark, have been pursued for back taxes by the US Customs and Border Protection (CBP), citing “the mining equipment is made in China” as a reason for needing to pay import duties. However, industry players have countered, stating that their supplier documents indicate otherwise.
To address this, ABTC and Gryphon Digital explicitly stated in their merger prospectus that the approximately $320 million transaction with Bitmain does not involve such tariff risks.
It is still unclear whether Bitmain will deliver “US-made Antminer machines” to ABTC, but Bitmain has begun importing electronic components with plans to set up production facilities in the US to avoid import tax issues.
Mining Market Cooling, Sales Targets Shift from Institutions to Retail
In addition to tariff issues, the overall demand in the mining market has also shown signs of cooling. Despite BTC still being in a bullish trend, the demand for mining machines has not kept pace, particularly with a noticeable weakening in the purchasing power of large institutions.
Earlier this month, Bitmain even began selling its S21e Hydro mining machine’s hash rate hosting plan directly to retail customers, a strategy that was rarely seen in the past when primarily targeting large institutional orders. This move also indicates that as the overall BTC network hash rate growth slows down, competition in mining equipment sales is becoming increasingly fierce.
Risk Warning
Investing in cryptocurrencies involves a high level of risk, and their prices can be extremely volatile. You may lose all of your principal. Please assess the risks carefully.
