Cryptocurrency mining operations based in the United States are looking to increase their hash power with more hardware despite Bitcoin’s (BTC) three-month downturn.
Marathon Digital Holdings and GEM Mining in the US told Cointelegraph this week that they each expect the size of their respective operations to grow through 2022, at least doubling the number of machines at their facilities.
2023Marathon Digital’s VP of Corporate Communications Charlie Schumacher told Cointelegraph that the company plans to deploy 199,000 new machines by 2023 to secure “perhaps the future of the global currency system.”
GEM Mining CEO John Warren said in an email that “he plans to have 32,000 miners on the network by the end of 2022.”
For Marathon, this will be more than a sixfold increase in size, while GEM’s capacity will double if the company fulfills its plans.
The fact that miners are expanding their activities is somewhat surprising. Concerns were raised late last week about the efficiency of miner capital as it was reported that many were selling BTC to conserve cash reserves. On February 13, Marathon Digital filed with the SEC to sell up to $750 million worth of its shares.
However, Schumacher clarified that the company is keeping its options open and “in a better position to operate through the capital markets” while looking for the most cost-effective growth path. He said that “serving on the shelf does not mean that they are necessarily sold. Everything we do is aimed at increasing optionality.” He continued
“We cannot control the price of BTC, but we can control how we react to the market. We believe that we are in a position to act opportunistically.”
Warren shares his optimism about the growth of the scale of his company. He told Cointelegraph that GEM has also not sold BTC to date.
His temperament may be due in part to the potential capital efficiency provided by recently proposed tax breaks in Illinois and Georgia. If passed, the bill in Illinois will offer tax breaks for cryptocurrency mining data centers and Georgia will cut taxes on electricity used to mine cryptocurrency.
While Marathon’s strategy appears to be to provide more sources of income, GEM is looking for ways to cut costs. Warren said: “Government mining tax credits are extremely beneficial for companies like GEM Mining because of their impact on the cost of using energy.”
“Energy is one of the most important resources for mining, and tax incentives that exempt you from selling or using electricity can help reduce overheads and maintain cash flow.”
Both Schumacher and Warren acknowledged the possibility of bitcoin price turbulence in the coming months. Schumacher did not comment on whether we are entering a “crypto winter” but made it clear that his company is focused on “reducing risk and enabling turnaround.”
Related: Tonga Timeline for Bitcoin as Legal Tender and BTC Mining with Volcanoes
Conversely, Warren noted that we are “more likely to be short-term bearish in the market.” In conclusion, he said
“I expect investment in bitcoin and the larger cryptocurrency to continue, regardless of short-term volatility.”