There are good markets and bad markets, but one of the things that investors and business owners usually hate most is unpredictable markets.
It’s that market uncertainty that’s been driving state Rep. Lee Filer, R-Cheyenne, a little nuts in recent weeks, exacerbated by President Donald Trump’s tariff threats toward Canada.
“Businesses want predictability,” he said. “If you don’t have predictability and know what to expect, they try to hold off a little bit.”
Filer is the state director for Crypto Knight Hosting, a Cheyenne company he runs with his nephew Joey Darwell that provides hosting infrastructure for local bitcoin miners and data centers.
Their work includes the installation of computer and circuit board transformers, equipment Filer said, which often comes from Canada.
Crypto Knight is in the business of providing power as each of its transformers runs nearly 3 megawatts of power.
Instead of forcing small-time operators to work with utility companies directly, Crypto Knight has a curtailable load agreement with Black Hills Energy that allows it to provide its customers with better rates than if they pursued them individually.
“Now you’re making money on your machines, not losing it,” Filer said. “You don’t have to spend millions of dollars to get into it, we take care of that for you.”
Tariffs And Uncertainty
Trump first threatened tariffs on Canada and Mexico in January, touting a need to enhance border security and stop the flow of fentanyl over the nation's borders, before they were twice delayed.
Last, Trump announced a 25% tariff on car parts coming into the U.S., and announced more 25% tariffs on other products on Wednesday.
The Senate was alao expected to vote Wednesday on a measure aimed at blocking tariffs on Canadian products, as Democrats seek support from a handful of Republicans willing to buck Trump.
The resolution, led by Democratic Sen. Tim Kaine of Virginia, would terminate the national emergency that the president is using to impose the tariffs, effectively blocking the sweeping levies on imports.
Due to Trump’s ongoing tariff threats with Canada, Filer said many of the suppliers of this equipment are now scaling back their production. A tariff is a government surcharge on products imported from other countries.
Crypto Knight helps provide services to upstart data centers and bitcoin mining operations. (Courtesy Crypto Knight) 
State Rep. Lee Filer, R-Cheyenne, stands next to one of his company’s transformers. (Courtesy Crypto Knight) 
Crypto Knight is a local Cheyenne based company founded in 2022. (Courtesy Crypto Knight)
‘I Didn’t Think It Would Hit My Business, But It Did’
Filer said Trump’s back-and-forth negotiations with Canada, Mexico and Europe has driven a general sense ofpessimism about investing in data centers and bitcoin mining, which has curtailed construction efforts.
“I didn’t think it would hit my business, but it did,” Filer said.
Filer said the transformers his business buys used to cost around $45,000 last year. Now, that cost has risen to nearly $70,000.
“Now, the supply isn’t high enough, so the demand for them, the price for the demand goes way up,” Filer said. “It makes those companies scale back because there’s uncertainty.”
It also increased overall costs on their full buildouts from $250,000 per megawatt of power to now around $350,000-$400,000 because of the uncertainty, setting a much higher bar for Crypto Knight’s return on investment.
Similar experiences have occurred in the stocks for bitcoin companies, which have dropped as much as 60%.
Luckily, Filer’s company has stockpiled many transformers it purchased last year, allowing it to finish an ongoing project it has in the Happy Jack area. However, business expansion doesn’t seem to be in the cards as long as prices stay high, Filer said, which he said is particularly key in his industry.
“In bitcoin mining, the more machines you have up and running, the difficulty goes up, but the better your customers do,” Filer said. “The more we can expand and build out, the better it is for our customers.”
Even if prices go up because of tariffs imposed on their products, Filer said he would still prefer that to the status quo, just to have a general sense of business stability that helps his company plan for the future.
Perceptions And Actions
Trump has consistently embraced the cryptocurrency, bitcoin mining, and data center industries, stating that he wants the U.S. to be the center point of the world for these types of activities. Filer wants Trump to consider this commitment when engaging his tariff threats.
“Let’s try not to tie our hands either because the investment is very large in this industry,” Filer said. “It’s heavy, it’s a big upfront capital expense.”
Data centers and bitcoin mining have become two blossoming industries in the Cheyenne area. There’s only one other company in the city that performs similar work to Crypto Knight, which operates more than 60 megawatts of total energy in Laramie County.
Although some have a negative perception about data centers and bitcoin mines because of the large quantity of water they draw on to operate in other areas, Filer said these concerns are unfounded in Cheyenne because of the relatively cool climate and development of closed loop energy systems.
“Nine months out of the year, the climate is almost perfect for every data center,” he said.
Filer said the sales tax revenue and jobs generated from the electrical output make them an astronomical benefit for the local community. The future of their operations is also critical for his workforce, the lowest paid member of which he said makes $22 per hour.
Leo Wolfson can be reached at leo@cowboystatedaily.com.
