Crypto mining operations based in the United States are committed to increasing their hash power with more hardware despite Bitcoin’s (BTC) three-month downturn.
The Marathon Digital Holdings and GEM Mining companies in the U.S. told Cointelegraph this week that they each expect the size of their respective operations to grow through 2022 by at least doubling the number of machines at their facilities.
Marathon Digital’s VP of corporate communications Charlie Schumacher told Cointelegraph in an interview that it is moving forward with plans to deploy 199,000 new machines by 2023 to secure what is “arguably the future of the global monetary system.”
GEM Mining CEO John Warren said via email that it “plans to have 32,000 miners online by the end of 2022.”
For Marathon, that would be more than a six-time increase in size whereas GEM’s capacity would double if it follows through with its plans.
The fact that miners are expanding their operations comes as somewhat of a surprise. Late last week, concerns were raised about the capital efficiency of miners as it was reported that many were selling off BTC in order to maintain cash reserves. Marathon Digital filed with the SEC to sell up to $750 million worth of its stock on Feb. 13.
However, Schumacher clarified that the company is keeping its options open and “is in a position to better work through capital markets” while it looks for the most economically efficient way towards growth. He said that “filing to shelf doesn’t mean they are necessarily selling. Everything we do is about increasing optionality.” He continued
“We can’t control the price of BTC, but we can control how we react to the market. We believe we are in a position to act opportunistically.”
Warren shares optimism about growing his company’s scale. He told Cointelegraph that GEM has also not sold any BTC to date.
His temperament can be derived in part by the potential capital efficiency provided by newly proposed tax incentives in Illinois and Georgia. If passed, the Illinois bill would offer tax breaks for crypto mining data centers, while Georgia would reduce taxes on electricity used for crypto mining.
Whereas Marathon’s strategy appears to be securing greater sources of revenue, GEM is seeking out ways to reduce expenses. Warren said, “State tax incentives for mining are tremendously beneficial to companies like GEM Mining due to their effects on the cost of energy use.”
“Energy is one of the most significant inputs for mining operations, and tax breaks that exempt the sale or use of electricity can assist with reducing overhead costs and maintaining cash flows.”
Both Schumacher and Warren acknowledged the possibility for turbulence in Bitcoin price over the next coming months. Schumacher would not comment on whether we are entering a “crypto winter”, but made it clear that his company focuses on “decreasing risk and making sure that we can pivot.”
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Conversely, Warren commented that we are “more likely in a short-term bearish sentiment within the market.” He concluded by saying
“I anticipate there will be continued investment in bitcoin and the larger crypto space, regardless of short-term volatility.”