Despite the steady decline of Bitcoin prices and the turmoil in the markets today, some of the biggest mining companies insist that their operations will not be affected by negative price volatility.
Some even see it as an opportunity to gain market share as smaller competitors collapse.
Bitcoin (BTC) prices have been in a steady decline all year until the last 24 hours, when the crash accelerated and hit the lowest point since December 2020. But miners were not deterred amid this enormous repression. If the downtrend in Bitcoin continues into 2022, some may be even more enthusiastic about mining.
The three different mining operations that Cointelegraph reached out (two large public companies and one private mining company) each shared some cool sentiments about the possibility of a bear market. They believe it will have little or no impact on their business plans.
Bitcoin miner Marathon Digital Holdings (MARA) says its “asset-light strategy” will keep it insulated from nearly all the effects of a bear market. Charlie Schumacher, Vice President of Corporate Communications, told Cointelegraph that “by outsourcing the power of our operations and keeping the intellectual power within the firm” maintained a cost base of approximately $6,200 per BTC issued in Q1.
Marathon is the third largest Bitcoin (BTC) holder among publicly traded companies, according to BitcoinTreasuries. It is capable of generating 3.9 exahash (EH/s) hash power. MARA is down 15.42% and is trading at $9.97 in after-hours trading. It is down 92.6% from the December 2014 high of $134.72.
Schumacher added that the exit of other miners due to capital constraints during bear markets creates an opportunity for larger operations like Marathon, which can take advantage of the lower mining difficulty from the reduction in hash power and competition on the Bitcoin network.
“As the hash rate drops, there is a downward difficulty adjustment that reduces the energy expenditure for miners who continue hashing. So those who survive can benefit by potentially earning more Bitcoin.”
Cointelegraph also received responses from Jason Les, CEO of Riot Blockchain (RIOT), another major mining company. It currently holds the eighth most BTC among publicly traded companies, according to Bitcoin Treasures. It controls 3.9 EH/s of hashrate as of March 4, but has not disclosed the cost per coin mined.
RIOT is down 9.16% and is trading at $6.83 in after-hours trading. It is down 90.5% from its February 2021 high of $71.33.
Les also seemed indifferent to current and future Bitcoin market volatility. Like Marathon and Redivider, Les cited his company’s “strong balance sheet with no long-term debt” as key strengths he can rely on from a business perspective. “Changes in Bitcoin market conditions do not affect our miner distribution plans, so we continue to increase our hash rate monthly,” he added.
“Riot’s miner distribution plans are unaffected by the volatility in Bitcoin, we are focused on building a sustainable business that operates in a range of Bitcoin market conditions.”
Redivider CEO Tom Frazier is also not bothered by the prospect of a longer downturn. Redivider is a privately run data center provider for Bitcoin mining operations specializing in Zones of Opportunity designed to benefit workers in concessionary areas of the US.
The core of Redivider’s 1.5-year job is to manage data centers that can be rented out for a fee by Bitcoin hash power mining companies. In a May 11 call, Frazier told Cointelegraph that if data centers don’t have tenants at a given time, they can provide a revenue stream for all their facilities at any time by assuming Redivider’s hash power and blocking the rewards for themselves.
He didn’t reveal what Redivider’s underlying price per Bitcoin mined is or how large his work is, but he made sure that “our BTC production price will not be affected.”
Frazier said that the downturns in the Bitcoin market “have little impact on what we do because of our 10-year plan.”
“The corrections in the market are happening because BTC is so volatile, and this is in line with any other volatile asset class. This volatility will not hinder our strategy. These moments offer opportunities.”
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The current turmoil in the crypto markets following the collapse of project Terra (LUNA) and Bitcoin is currently trading at $28,931, its lowest level since January 1, 2021, according to data from CoinGecko. opportunity is on their doorstep, as they claim.