US miners are looking to boost their hash power with more hardware despite a three-month decline in bitcoin (BTC).
Marathon Digital Holdings and US mining companies GEM told Cointelegraph this week that they expect to increase their operations through 2022 by at least doubling the number of machines at their facilities.
Charlie Schumacher, director of corporate communications for Marathon Digital, said in an interview with Cointelegraph that plans are underway to deploy 199,000 new machines by 2023 to provide “what is, without a doubt, the future of the global monetary system.”
By the end of 2022, they plan to connect 32,000 miners to the network,” John Warren, president of mining company GEM, said in an email.
For Marathon, volume will increase more than six times and GEM’s capacity will double if the company fulfills its plans.
The fact that miners are expanding their business is surprising. At the end of last week, there were concerns about the efficiency of the capital of miners, when many of them reportedly sold bitcoins in order to maintain cash reserves. On February 13, Marathon Digital filed with the Securities and Exchange Commission to sell up to $750 million of its shares.
However, Schumacher stressed that the company is keeping opportunities open and “in a position to do better in the capital markets” as it seeks the most cost-effective growth path. “Archiving on the shelf doesn’t necessarily mean they’re on sale. Everything we do is about empowering,” he said.
“We cannot control the price of bitcoin, but we can control how we interact with the market. We think we are in a position to act opportunistically.”
Warren shares the optimism about the increase in the size of the company. He told Cointelegraph that GEM has yet to sell BTC.
His sentiment may be fueled in part by the potential capital efficiency offered by recently proposed tax breaks in Illinois and Georgia. If passed, the Illinois law will provide tax breaks for crypto mining data centers and Georgia will reduce taxes on electricity used for crypto mining.
While Marathon’s strategy seems to be to provide more sources of income, GEM is looking for ways to cut costs. “Government tax incentives for mining are very beneficial for companies like GEM Mining because of their impact on the cost of using energy,” Warren said.
“Energy is one of the most important factors of production for mining, and tax incentives that exempt you from selling or using electricity can help reduce fixed costs and maintain cash flow.”
Both Schumacher and Warren acknowledge the possibility of bitcoin price turbulence in the next few 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 making sure we can change it.”
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In contrast, Warren commented that “we are likely to see a short-term downturn in the market.” finished by saying
“I expect investment in bitcoin and the larger cryptocurrency to continue regardless of short-term fluctuations.”