US Crypto Miners Determined To Increase Hash Rate With More Hardware

Bitcoin miners in the US want to increase Hash Rate. (photo: doc. unsplash)

JAKARTA – A United States-based cryptocurrency mining operation is committed to increasing their hash power with more hardware even though the price of Bitcoin (BTC) has continued to decline for three months.

US firms Marathon Digital Holdings and GEM Mining 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 in their facilities.

Digital Marathon's Vice President of Corporate Communications, Charlie Schumacher, told Cointelegraph in an interview that they are moving forward with plans to deploy 199,000 new machines by 2023. This is to secure what is "arguably the future of the global monetary system."

GEM Mining's CEO, John Warren, said by email that it "plans to have 32,000 miners online by the end of 2022."

For the Marathon, it will be more than six times the size increase while the GEM capacity will be doubled if it follows the plan.

The fact that miners are expanding their operations is somewhat surprising. Last weekend, concerns arose about the capital efficiency of miners as it was reported that many were selling BTC to maintain cash reserves.

Digital Marathon filed with the SEC to sell its shares worth up to US$750 million (Rp 10.7 trillion) on February 13.

However, Schumacher clarified that the company remains open to options and "is in a position to do better through the capital markets". This is done while seeking the most economically efficient way to growth.

“Filed to shelves doesn't mean they have to sell. Everything we do is about increasing the optionality."

“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," added Schumacher.

Warren shares his optimism about his company's growing scale. He told Cointelegraph that GEM has also not sold any BTC to date.

His temperament could be lowered in part by the potential for capital efficiency provided by the 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.

While the Marathon strategy appears to be securing a larger source of income, GEM is looking for ways to reduce spending.

“State tax incentives for mining are very beneficial for companies like GEM Mining because of their impact on energy costs,” Warren said.

"Energy is one of the most significant inputs to mining operations, and tax breaks that exempt the sale or use of electricity can help reduce overhead costs and maintain cash flow," Warren added.

Both Schumacher and Warren acknowledged the possibility of Bitcoin price turbulence over the coming months. Schumacher would not comment on whether the world is currently entering a "crypto winter". But he explains that his company is focused on "lowering risk and ensuring that we can roll."

In contrast, Warren stated that we are "more likely to be in a near-term bearish sentiment in the market."

“I anticipate there will be continued investment in bitcoin and the larger cryptocurrency space, despite the near-term volatility,” Warren said.