While the cryptocurrency economy is giving some people the cold shoulder, American Bitcoin miners are keeping their spirits up. Between new environmentally friendly techniques and the increase in their machine fleets, projects are coming along and confidence is high. A breath of optimism in the midst of the current slump.
The ambitious plans of American Bitcoin mining companies
In a statement to Cointelegraph, the spokesperson for the company Marathon Digital Holdings confided its ambitions for the coming years. The company specializes in Bitcoin mining and is based in Hardin, Montana. It plans to deploy 199,000 machines by 2023 for a power of about 23 Hexahash. That’s a sixfold increase in their current installations! And all this to secure what is “arguably the future of the global monetary system”. Charlie Schumacher is wildly optimistic!
On his side, John Warren, the CEO of GEM Mining, a company based in Greenville, South Carolina, announced by e-mail that he was going to increase the size of his company’s operations. – in South Carolina, announced in an e-mail that he wanted to double his work capacity to 32,000 miners by the end of the year. These announcements may come as a surprise given the overall state of the cryptocurrency economy. The price of Bitcoin has been falling steadily. A sharp increase in the hash rate that decreases the profitability of operators. A regulatory outlook that is not always clear. So what is their secret?
Bitcoin mining companies continue to invest despite the unfavorable economic climate around cryptocurrencies.
…despite a rather unfavorable context at the beginning of 2022 !
To maintain a certain level of cash reserves, mining companies have to find solutions. Previously they could sell their precious bitcoins to pay their bills and expenses in general. But with the drop in price, this is not really interesting anymore. That’s why they prefer to sell their shares on the stock exchange! Marathon Digital has thus filed an application with the SEC (equivalent to the Financial Markets Authority) to sell up to 750 million dollars of its shares on February 13. GEM told Cointelegraph it has not sold a single bitcoin when Marathon states:
“We started hodling in October 2020, and since then we haven’t sold a single satoshi.”
The same is true of wealth management firm DA Davidson – an astute observer of the market – which states that “
“The big mining companies prefer to sell shares, because their shareholders want to keep the bitcoins in reserve and do not even think about selling them.”
Solutions to be found in regulation and traditional management
Schumacher goes on to say, “We can’t control the price of BTC, but we can control how we react to the market. The mining companies therefore prefer to find alternative solutions rather than part with their family jewels. Marathon seems to want to increase its production capacity to remain profitable while GEM is moving towards a decrease in its expenses.
To do this, it is looking to take full advantage of the new regulatory arrangements available in the country. On this subject, Warren details:
“Energy is one of the most important inputs [expenses] for mining operations, and tax breaks that exempt the sale or use of electricity can help reduce overhead costs and maintain cash flow.”
So we’re headed for competition among U.S. states over Bitcoin mining, as we can already see in the tax arena. Illinois and Georgia having already made announcements on the subject. We will have to keep an eye on the situation in the coming months.
Notwithstanding the short-term volatility and turbulence in the price of Bitcoin, mining companies are betting on the future. They are currently looking to “de-risk and balance” until this bearish episode ends. The situation in the Ukraine is the subject of much commentary, but it does not alter the much-needed optimism of companies that are betting on Bitcoin’s adoption in the coming years. They’ve already gone all-in and are now waiting for the flop to continue.
