“We will be creating so much electricity that you’ll be saying, ‘Please please Mr. President! We don’t want any more electricity, we can’t stand it!’ You’ll be begging me, ‘No more electricity, sir, we have enough, we have enough.’”
That was the major line from Presidential candidate Donald J. Trump at the 2024 Bitcoin Conference in Nashville. Or at least it was for Bitcoin miners hopeful for an end to the Biden-era campaign against their industry.
So far, President Trump’s second term has been a mixed bag for the Bitcoin coalition. His administration has mopped up regulatory abuses via shadow initiatives like Operation Chokepoint 2.0, a demonstrable win, but this is partially offset by Trump’s aggressive tariff regime, which has been a headache specifically for bitcoin miners.
But the so-called Big Beautiful Bill is shaping up to be a boon for bitcoin miners – at least in part.
The budget reconciliation bill narrowly passed the House and Senate with the President’s endorsement. Nestled in controversial boosts to military spending, border security, and other provisions, the bill includes new depreciation rules for hardware that applies to bitcoin miners.
There’s one positive, but the bill also nixes Federal tax credits for renewable energy projects, a big loss for solar and wind power miners. Net-net, the bill is a more of a win for miners than not, particularly smaller scale ones in the bootstrapping phase.
What the Big Beautiful Bill’s 100% depreciation clauses mean for bitcoin miners
The most beneficial aspect of the bill for bitcoin mining companies are changes to the Federal tax code that permanently restore 100% bonus depreciation for “certain business property” (section 168(k)) and a new subsection for 100% depreciation for “qualified production property” (section 168 (n)). Section 168 (k) applies to short-lived tangible property, while section 168 (n) applies to real estate used in manufacturing and production.
For miners, the amendment to section 168 (k) means that they can now claim full depreciation of assets including ASIC miners, immersion tanks, hydro systems, electrical gear, racks, and other “business property” the same year the miner purchases and installs them for property acquired after January 19, 2025.
The section 168 (n) provision for “qualified production property,” on the other hand, has ramifications for companies that fabricate mining infrastructure and hardware in the U.S. Companies that manufacture immersion infrastructure, hydro-cooling infrastructure, ASIC chips, ASIC miners, and similar industrial goods in the United States can harvest 100% depreciation for real estate and construction expenses. The 100% depreciation for this provision applies to facilities whose “construction … begins after January 19, 2025 and before January 1, 2029” and that are placed in service before January 1, 2031.
Section 168 (k)’s 100% bonus depreciation will have the biggest impact on miners. Now, they can fully depreciate hardware expenses in the same year, rather than drawing out depreciation over 5 years for ASICs, transformers, switchgears, and similar infrastructure; 7 years for containers, skid-mounted generators, and the like; and 15 years for land improvements such as concrete pads, fencing, and drainage.
So for example, a bitcoin miner who purchases and installs $50 million worth of ASICs after January 19, 2025 can write off that $50 million expense on their taxes for the same tax year.
Second Gate Advisory co-founder Brandon Bailey said that the amendment is a clear win for bitcoin miners, but he added that smaller miners in the bootstrapping phase stand to benefit the most.
“Trump’s big, beautiful bill … could provide a substantial benefit to small-scale miners. Home miners, in particular, would be able to purchase new machines and immediately claim the full depreciation expense. This could offset all gains and earned income from mining in the first year of operation when mining rewards are typically at their highest level due to rising difficulty. As a result, home miners may be able to operate profitably without paying income taxes on their mining rewards,” he said.
But for industrial-scale miners, particularly public entities, the benefits may be less clear and paint the wrong picture for shareholders when these companies report earnings.
“For large-scale miners, however, the benefits may be more nuanced. While claiming full depreciation upfront can reduce taxable income, it will also result in lower reported net income potentially affecting investor perception of the company’s financial performance. Additionally, spreading depreciation over a longer period can help large miners smooth out earnings volatility and better align depreciation expenses with their actual capital expenditure cycles,” Bailey concluded.
The Big Beautiful Bill is a headwind for renewable energy bitcoin miners
Immediate hardware depreciation is a plus for bitcoin miners, but another key provision in the bill will be a thorn in the side of miners who lean on renewable energy.
Amendments to sections 45Y and 48E in Federal tax law eliminate production credits (PTC) and investment credits (ITC) for wind and solar projects in service after December 31, 2027, unless construction begins by July 4, 2026.
Section 45Y also includes a “Restrictions Relating to Prohibited Foreign Entities” subsection. These provisions bar tax credits for any company that leverages “any material assistance from a prohibited foreign entity” (looking at you, China) “if construction begins after 12/31/2025”; they also eliminate “any credit for a taxpayer that is a ‘specified foreign entity’ or ‘foreign‑influenced entity.’
On a high level and all-else being equal, these amendments could lead to higher power prices in renewable energy-heavy areas, like ERCOT’s West Texas zone, because renewable energy companies will no longer be able to claim PTC and ITC tax credits.
More specifically, the changes will negatively impact miners directly who own renewable assets or who have joint-ventures with renewable energy producers.
Moreover, any bitcoin miners or renewable companies that rely on solar panels manufactured by Chinese entities will see a quicker phase out of tax credits. According to USImportData, 9 out of 10 of the largest solar companies that sell to the U.S. market are operated by Chinese entities.
So even if these companies manufacture solar panels outside of China – and depending on how strict the Treasury Department is about classifying them as “prohibited foreign entities” – companies that utilize materials from these companies cannot harvest tax credits for construction that begins after December 31, 2025. Companies relying on Chinese solar manufacturers will have to rethink how they source panels – a tall order given that Chinese firms dominate the market.
Dipul Patel, the CTO of renewable energy-focused bitcoin miner Soluna, told Blockspace that he anticipates the renewable tax credit cuts will “raise power costs [and] decrease green energy on the grid.”
“The Big Beautiful Bill imposes new penalties on solar and wind projects, while restricting access to Chinese-made solar components, a key source of affordable panels. This will delay or derail many renewable energy projects during development – when momentum is key. This will raise energy prices as well as limit access to clean, low-cost energy necessary for bitcoin miners to scale efficiently,” Patel said.
Other odds and ends
Back to the positives, there are a few other provisions in the Big Beautiful Bill that should give bitcoin mining companies a reason to smile.
Changes to section 163(j) let qualifying miners deduct more of their equipment‑financing interest up front (based on 30% of EBITDA) instead of having to carry as much forward.
The bill also introduces a new section to the tax code, section 174A, which would allow immediate deduction to certain domestic research and development rather than amortization. This could be a windfall to Bitcoin mining software, services, and hardware companies that produce firmware, proprietary ASIC chip layouts, cooling technology, and other forms of intellectual property.
All in all, the Big Beautiful Bill’s alteration of depreciation rules in the tax code provide the biggest benefit to miners. But the slashes to renewable energy tax credits will harm renewable-focused miners – and could potentially fly in the face of Trump’s promise of “creating so much electricity.”
