By/ Hedy Bi, OKG Research
Returning to the "survival of the fittest" principle, the United States is set to fire the first shot of a trade war tomorrow morning (April 2nd, Eastern Time), with "America First" clearly trumping multilateralism. The global economic crisis is already partially priced in by the market, with gold rising 18% since the beginning of the year and repeatedly hitting new highs. However, opportunities still exist amid the crisis. We seem to detect a glimmer of opportunity from the Trump family's latest crypto business layout, and despite high mining costs and thin profit margins, the crypto industry appears to be simultaneously accelerating "Made in America" and "Trump-made". In the words of Donald Trump Jr., "the future has no limits". This article is the seventh piece in OKG Research's 2025 special planning "Trump Economics", seeking vitality from crisis and deeply analyzing the impact of tariffs on the entire crypto industry chain. Tariffs, historically known as "border taxes", have been used to levy duties on goods in transit to manage Silk Road trade. As a macroeconomic tool, tariffs directly affect commodity market prices and circulation efficiency. For the crypto industry, this means not only focusing on the prices of directly related goods and technologies but also understanding its deeper impact on overall industry efficiency, supply chain liquidity, and market structure reshaping. **Tariffs Will Directly Increase Bitcoin Mining Costs by 17%** In the crypto industry, Bitcoin has always been the most representative digital asset, dominating market dynamics. According to CoinMarketCap data (April 2, 2025), Bitcoin's market cap accounts for 59% of the entire crypto market, far exceeding other digital assets. Bitcoin relies on the Proof of Work (PoW) consensus mechanism, making mining machine prices and supply chains key factors in market trends. Despite the U.S. mining pool's hash rate share increasing from 37.64% to 45.15%, the mining machine supply chain remains dominated by Chinese manufacturers, particularly Bitmain, MicroBT, and Canaan, which occupy over 70% of the global mining machine market. Therefore, the Trump administration's goal of "bringing Bitcoin mining back to the U.S." faces significant challenges. The U.S. tariffs on Chinese electronic products exacerbate this supply-demand mismatch. It is estimated that a 20% tariff on Chinese electronics will increase mining machine costs by approximately 17%, directly impacting mining farms' investment return cycle (ROI). This change is particularly critical for new mining farm operators who may need to reassess their profit models. Additionally, although MicroBT and Bitmain have announced manufacturing centers in the U.S. and Malaysia to promote mining machine production decentralization, this transition also brings delivery delays, with customers potentially waiting 1-3 months for equipment, posing significant challenges for mining farms dependent on timely delivery. Global semiconductor shortages and U.S. technology export restrictions to China force mining machine manufacturers to establish production bases in multiple countries to reduce risks. This change leads to unstable mining machine supplies, potentially causing short-term supply bottlenecks that affect mining farm expansion and operational capabilities. With rising mining machine prices and increasing delivery delays, the mining industry may gradually become more centralized. Large mining enterprises will gain more market share through financial advantages, while small mining farms may face greater survival pressure, with extended investment return periods forcing them out of the market. Overall, tariff policies and supply chain fluctuations are profoundly impacting the Bitcoin mining industry. Increased costs, delivery delays, and supply chain instability extend mining farms' investment return periods while accelerating industry centralization. Large mining enterprises may dominate the market, while small mining farms will face more severe survival challenges. Beyond Bitcoin, other blockchain projects relying on imported non-U.S. electronic hardware (such as AI) will also face similar cost pressures. **Offline Blockade and Online Openness** U.S. tariff policies not only directly affect commodity costs but also have far-reaching implications for reshaping global financial order. In recent years, the rapid rise of U.S. dollar stablecoins has become part of the U.S. financial strategy—building barriers offline while accelerating openness online. Traditionally, global trade settlement has relied on banking networks, with SWIFT, CHIPS, and other clearing systems dominating international capital flows. However, as geopolitical conflicts intensify, the U.S. has not only imposed tariffs but also reshaped global trade through data decoupling and financial regulation. A prime example is the No. 14117 executive order signed by President Biden in 24, aimed at restricting "countries of concern" from accessing U.S. data. The "14117 executive order" will take effect on April 8, requiring companies like Paypal to adjust their operations within mainland China. While seemingly targeting cloud computing and chip industries, the policy effectively cuts off multinational enterprises' supply chain data sharing, causing chain reactions in trade finance and payment settlements. In this context, U.S. dollar stablecoins become a new channel for global fund flows. This means that when traditional banking networks face regulatory restrictions, stablecoin networks can still provide U.S. dollar liquidity to global markets. For instance, Argentine financial firms, Southeast Asian exporters, and even some Middle Eastern traders have begun bypassing banking systems, directly using USDC or USDT for supply chain payments. Stablecoins' low-cost and instant settlement characteristics make them ideal for cross-border trade. Traditional bank transfers may take 2-5 days with high fees (SWIFT transfer average cost is $20-40), while using USDC typically costs less than a cent and can be completed in seconds. More symbolically, in countries like Argentina and Nigeria with strict capital controls, stablecoin demand becomes increasingly urgent. In 2024, purchasing stablecoins in Argentina required a 30% premium, while in Nigeria it was 22%. Behind these premiums lies the blockage of traditional financial channels and local currency depreciation, with stablecoins becoming key tools for residents and businesses to bypass banking networks and protect wealth. **Post-Tariff Landscape: Liquidity Expansion Beyond the Federal Reserve** After tariffs, U.S. dollar stablecoin market demand will increase, more accurately, a "shadow U.S. dollar market" bypassing Federal Reserve regulation is rapidly expanding globally. Beyond their "de-banking" circulation paths, stablecoins like USDT and USDC rely on U.S. Treasury bonds as collateral. This model still appears indirectly influenced by Federal Reserve policies—U.S. Treasury bond yields determine stablecoin issuance costs. However, stablecoin liquidity creation mechanisms are not directly controlled by the Federal Reserve. When market demand for U.S. dollars is high, stablecoin issuers can quickly increase supply without Federal Reserve approval. This means that even if the Federal Reserve wants to tighten liquidity through restrictive policies, the stablecoin market can still "covertly release water" and continue expanding U.S. dollar supply globally. Previously, the Federal Reserve could adjust U.S. dollar supply speed through the banking system, but now these "on-chain dollars" have completely separated from banking networks, rendering the Federal Reserve's traditional regulatory methods almost ineffective in the stablecoin market.The liquidity of stablecoins is mainly concentrated within the crypto market. DeFi platforms, centralized exchanges (CEX), and on-chain payment systems form a "internal circulation" of stablecoins. A large amount of capital has not flowed back to the Federal Reserve's regulated financial system, but instead remains in this emerging on-chain dollar economy. Moreover, many DeFi platforms offer dollar deposit rates far higher than traditional banks, which further weakens the Federal Reserve's interest rate transmission mechanism. Even if the Federal Reserve adjusts its benchmark interest rate, the capital flow in the stablecoin market still operates according to its own logic, becoming a relatively independent dollar financial system.
Demand from the stablecoin market has also driven up the market demand for US Treasury bonds and lowered their yields. It is worth noting that with the introduction of RWA, the liquidity of stablecoins has begun to enter broader asset pools, further intensifying this trend. This means that the interaction between the stablecoin market and the US Treasury bond market will become more complex, and may even influence the capital pricing logic of global capital markets in the future.
The day of tariff announcement, dubbed the "Liberation Day," will bring restrictions to some extent in terms of cost and circulation. However, by strengthening offline blockades and expanding on-chain dollar liquidity, the United States is quietly reshaping the global financial architecture. From decoupling supply chain data to limited bank clearing, and the rapid rise of stablecoins, we seem to be witnessing a financial transformation.
Do you remember the original intention of Bitcoin written in its white paper? A completely peer-to-peer electronic currency should allow online payments to be sent directly from one party to another without going through a financial institution. Perhaps we are now standing at the threshold of this vision.
