The United States is home to crypto mining operations that are determined to increase their hash power despite Bitcoin’s three-month decline.
Cointelegraph was informed this week by the U.S. companies Marathon Digital Holdings, and GEM Mining that their respective operations will grow at least two-fold through 2022.
Charlie Schumacher, 2023Marathon Digital’s Vice President of Corporate Communications, told Cointelegraph that the company is moving forward with plans for 199,000 additional machines to be deployed by 2023 in order to secure “arguably the future global monetary system”.
John Warren, CEO of GEM Mining, stated via email that the company “plans to have 32,000 miner online by 2022.”
Marathon would experience a six-fold increase in its size, while GEM’s capacity would more than double if it followed through with its plans.
It is not surprising that miners are expanding operations. Concerns were raised last week about the capital efficiency and liquidity of miners after it was reported that many were selling BTC to preserve cash reserves. Marathon Digital applied to the SEC to purchase up to $750 millions of its stock, on February 13.
Schumacher said that the company was keeping its options open, and is “in a better position to work through capital markets”, while seeking the most economic efficient route towards growth. Schumacher stated that just because they have filed to shelf, it doesn’t necessarily mean they are selling. He said that everything we do is about increasing flexibility.
“We cannot control the price of Bitcoin, but we can influence how we react to it.” We feel we have the ability to act opportunistically.
Warren is optimistic about the company’s growth. Cointelegraph was also informed by Warren that GEM has not yet sold any BTC.
The potential capital efficiency offered by new tax incentives in Illinois or Georgia can partly explain his temperament. The Illinois bill, if passed, would provide tax breaks to crypto mining data centers. Georgia would lower taxes on electricity used in crypto mining.
Marathon’s strategy seems to be to secure more revenue sources, but GEM is looking for ways to lower expenses. Warren stated that GEM Mining is greatly benefitted by state tax incentives for mining due to their impact on energy costs.
“Energy is a key input for mining operations. Tax breaks that exempt the sale and use of electricity may help to reduce overhead costs and maintain cash flows.”
Both Schumacher as Warren acknowledged that there could be volatility in Bitcoin prices over the coming months. Schumacher did not say whether we are in a “crypto winter”, but he made it clear that his company is focused on “decreasing risks and making sure we can pivot.”
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Warren, however, stated that it was more likely that there would be a bearish sentiment in the short-term market.
“I expect there will continue investment in bitcoin, and the larger crypto space overall, regardless of any short-term volatility.”
Eileen Wilson –Technology and Energy
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