The United States has emerged as one of the largest hubs for Bitcoin mining globally, especially following China’s sweeping crackdown on crypto mining activities in 2021.
The U.S. share of global Bitcoin mining surged from just 4.5% in 2020 to an impressive 37.8% by January 2022.
Now, with former President Donald Trump’s pro-crypto stance and recent initiatives around the Strategic Bitcoin Reserve, American miners are feeling increasingly optimistic about expanding their operations.
In an interview with Invezz, Mark Zalan, CEO of GoMining — a digital mining platform — shared insights into the industry’s renewed optimism.
“If the federal government establishes a national framework for crypto regulations and offers tax incentives to miners, it will cement the U.S. mining sector’s global leadership,” Zalan said.
However, the industry continues to face criticism over its energy consumption. Mining a single Bitcoin demands as much electricity as powering 61 U.S. homes for a year, according to NFTevening.
Zalan also discussed how GoMining is advancing sustainable practices, why smaller miners may struggle without consolidating into mining pools, and how mining infrastructure could be adapted to support AI workloads — creating new revenue opportunities for miners.
Here are edited excerpts from the emailed interview:
Mark Zalan
Strategic Bitcoin Reserve decision, SEC’s stance on mining boosting confidence
Invezz: According to recent statistics, US-based mining pools now control over 40% of the global hash rate. What’s driving the investments and confidence in Bitcoin mining in the US?
I think the US is finally on the right track to becoming the “crypto capital of the world” — something the domestic market has long been anticipating.
Many investors, from retail to institutional, wanted to enter the growing vertical, but they were worried about the industry’s ambiguous legal status.
President Trump’s decision to create the Strategic Bitcoin Reserve and the Digital Asset Stockpile was a powerful signal to many investors that Bitcoin and other cryptocurrencies are legitimised as a “clean” asset type.
At the same time, the regulators clarify their stances towards mining: for example, the SEC recently confirmed that mining activities are not a security.
That gives us more breathing space to focus on value creation for our investors and increase CapEx to expand operations.
Trump family’s BTC mining venture an ‘influencer endorsement’ event for the industry
Invezz: Recently, it was announced that Donald Trump’s sons are partnering with Hut 8 for a new Bitcoin mining venture. As a player in the sector, how significant is this development?
This partnership shows that the sector is rapidly growing in light of the recent and possibly coming regulatory changes.
The industry expects new significant demand drivers, and this inevitably attracts the attention of the new players eyeing to capture profits.
I think competition is great news because it will enable more innovation in the sector and raise standards for the benefit of our clients in the long run.
This also signifies even further legitimization of the industry and serves as the mining’s own “influencer endorsement” event.
On institutional investor interest in BTC and mining
Invezz: GoMining recently announced the launch of the $100m Alpha Blocks Fund. Do you think institutions are ready to invest in Bitcoin mining?
Institutional investors are increasingly interested in BTC and mining.
For example, EY-Parthenon and Coinbase surveyed 352 firms, over 80% of which plan to increase their crypto exposure.
Through GoMining Institutional’s Alpha Blocks fund, institutional investors can access structured mining-backed yields with two investment strategies.
We focused on ensuring the transparency of traditional markets and robust security, so we established a closed-ended limited partnership domiciled in Delaware and partnered with BitGo, a leading institutional custodian.
GoMining Institutional will expand its product offerings with tokenized fixed-yield funds and debt products, creating real yields and giving direct exposure to BTC mining instead of traditional equity investments.
Our approach is forward-looking, and it has the potential to unlock a whole new asset class for institutional investors, uniting the longstanding practices of TradFi and the innovative yield products of the crypto space.
Tax break for miners to solidify US mining’s global leadership
Invezz: With the Trump administration’s pro-crypto stance, how have recent regulatory shifts impacted Bitcoin mining? What policies would best support domestic mining operations?
The Trump administration started a new age in crypto development, clarifying previously vague legal areas and serving as a key demand driver for the mining industry.
This creates a justified optimism in the sector. In the future, the federal government will solidify the US mining sector’s global leadership if it creates a national framework for crypto regulations and introduces tax breaks for miners.
Quoting Secretary of Treasury Scott Bessent, “Everything is on the table with Bitcoin.”
Invezz: Recent bitcoin mining has cut mining rewards by half and squeezed the industry’s profit margin, making it tough for smaller players to compete with big operations. Your thoughts?
Bitcoin mining continues to be very profitable, and halvings are always priced in.
The Strategic Bitcoin Reserve and proposed state reserves reinforced BTC’s credibility among institutional investors, who will drive up demand and prices in an environment with tight supply.
Another angle of upward demand pressure is the introduction of state-level legislative mechanisms to allow the investment of public funds in Bitcoin.
Why could it get difficult for smaller players in Bitcoin mining to operate?
The result will be a new equilibrium in the long run. Smaller players and individual miners will indeed find it harder to compete: the economies of scale are at work now.
Large miners can also diversify into AI computing and work on optimizing the costs of mining facilities, further enhancing profits.
The best approach for them is to participate in large mining pool operations.
GoMining is the leading platform for that, and we have the computing power and expertise to deliver the best returns while preserving the decentralized spirit of crypto.
Invezz: There are many different models of the cost-to-mine BTC. Could you share whether mining is still viable for smaller players or if industry consolidation is inevitable?
The average mining cost fluctuates around $90,000 per BTC, according to MacroMicro’s latest estimates.
Another prominent model, the Difficulty Regression Model from Glassnode, indicates that production costs are approximately $33,000 per BTC.
Cost-to-mine figures often do not tell the whole story. A lot depends on electricity costs, but labour and hardware costs are also a crucial part of the equation.
Consolidation, at least partially, is inevitable, and it is a healthy sign of a maturing industry.
Barriers to mining profitability are now higher, as large miners possess sophisticated technology and capital to build and operate data centers.
To unlock access to the economies of scale, smaller players have to eye consolidated options like pool mining.
On BTC mining’s high energy consumption and steps to ensure sustainability
Invezz: Bitcoin mining is often criticized for its high energy consumption. How does GoMining ensure sustainability in its operations?
Almost 100% of our fleet is powered by electricity from hydropower plants, which is a renewable source of energy.
Our scale of electricity consumption allows us to bring up mitigation strategies to ensure sustainability.
Innovations such as crypto mining and renewable energy are complementary, and data centers sometimes become key consumers of renewable energy.
As a member of the Bitcoin Mining Council, we also work on finding and implementing solutions to lower energy consumption. Improved environmental standards are a priority for our industry.
Invezz: Rising electricity costs have squeezed mining profitability. How are you hedging against energy price volatility?
We are strategic about choosing locations for data centers, and a reliable supply of inexpensive electricity is an important factor.
Electricity prices are very volatile throughout the day, and we surely take this volatility into account.
Everybody in GoMining has access to very competitive electricity prices due to the large scale of bulk purchases by our team.
In various regions, we, like many large miners, work with peak hours of electrical energy load and power purchase agreements to ensure a stable and smooth price schedule.
Despite electricity costs rising, the mining business’ margin remains positive.
How mining infra can be used for AI to capture additional revenues
Invezz: More mining firms are pivoting or diversifying into AI-related tasks. Is this a short-term trend or a fundamental shift in the business model? Could Bitcoin mining and AI become symbiotic industries?
Bitcoin mining and AI are symbiotic since they essentially require the same equipment.
Both are also capital-intensive and require financial acumen to build data centers and technical expertise to run them.
As miners, we can provide ready-made infrastructure for AI and high-performance computing while capturing additional revenues.
It only adds to the stability of our business model in the long term because it diversifies the range of tasks we can perform on our hardware.
Besides, small miners will no longer be dependent on BTC price fluctuations and can switch to more profitable tasks in case the price dips.
This additional revenue stream bolsters Bitcoin mining’s economic appeal and strengthens the resilience of the mining business models by diversifying income sources.
On more states introducing BTC reserve bills
Invezz: Texas, Florida, and New Hampshire are pushing their own Bitcoin reserves. How could this reshape competition among states in terms of mining incentives and regulations?
It is inspiring to see how US states tap into the potential of new technologies.
As of today, 28 state legislatures have already introduced Bitcoin reserve bills, with several gaining momentum.
For now, the reserves would start with seized Bitcoins, but with many targeting Bitcoin stockpiles to be as much as 10% of public funds, a supply of compliant, traceable, and clean Bitcoins is an absolute must.
We expect more transparency in the legal framework, energy agreements, permits to build data centers, and tax breaks, and in return, miners will bring investment, employment, and technological know-how.
The post Interview: Trump family’s Bitcoin mining deal is a sign of industry legitimization and an ‘influencer endorsement,’ says GoMining CEO Mark Zalan appeared first on Invezz
