1 week ago
Frank Holmes has had a agelong vocation arsenic a wealth manager: financing golden mining companies; getting progressive successful the instauration of golden royalty companies; processing fiscal products for the hose manufacture — each of this with U.S. Global Investors (GROW), the publicly-traded plus absorption steadfast he’s been starring since 1989.
He’s besides the president of HIVE Blockchain Technologies (HIVE), a bitcoin mining institution with a $345 cardinal marketplace capitalization and a rapidly expanding footprint successful Paraguay, acknowledgment to a caller woody successful which the steadfast acquired facilities antecedently owned by different miner, Bitfarms. The steadfast was born, helium said, aft helium attempted to motorboat a spot bitcoin exchange-traded money (ETF) successful 2017.
HIVE has been greenish from the get-go. Its archetypal installation utilized geothermal vigor successful Iceland; different utilized hydro-power successful Sweden, lone 100 kilometers southbound of the Arctic Circle. Now, the institution expects to person astir 430 megawatts (MW) of infrastructure up and moving by the 3rd 4th of 2025 — meaning capable vigor to powerfulness a metropolis of 86,000 homes.
Holmes will beryllium speaking astatine the BTC & Mining Summit astatine Consensus 2025, successful Toronto connected May 14-15.
In the lead-up to the event, Holmes shared his thoughts astir HIVE’s concern wrong the broader mining industry, the company’s determination to recycle its GPUs for AI purposes, and what the aboriginal holds.
This interrogation has been condensed and edited for clarity.
CoinDesk: HIVE has been repurposing immoderate of its GPUs for AI. Can you archer maine astir that?
Frank Holmes: At 1 clip we had 130,000 AMD chips and we were mining ether (ETH). We were astir 6% of the world's ether mining and it was precise profitable. When that went distant [with Ethereum’s modulation to Proof-of-Stake successful 2022], we had this expertise successful GPU chips and we replaced a batch of our AMD chips with Nvidia chips. That allowed america to commencement going down the AI path.
The quality betwixt a basal ASIC miner and Nvidia chips is similar driving a Bronco and a Ferrari. The delicacy of the motor, the engines, each the gearing that goes into a precocious show car — each of that relates overmuch much to a GPU. When Antminers S21 Pros amusement up, it takes america six hours to unwrap them and plug them in. When the Nvidia chips amusement up, similar an H100, it’s six weeks earlier you’ve built the encephalon and it’s working. So it's a wholly antithetic accomplishment set.
When you're gathering infrastructure for bitcoin mining, you're spending a cardinal dollars per megawatt of electricity. When you spell into precocious show computing (HPC), the facilities request truthful overmuch redundancy that you walk $10 cardinal per megawatt. That's excluding the equipment. You've got overmuch higher logistical engineering requirements, and you've got overmuch higher superior expenses.
When you privation to root vigor for bitcoin mining, you tin instrumentality adaptable energy, and the existent cardinal portion is the outgo of the energy. In Sweden, we tin spell from 30 megawatts to 3 megawatts successful 15 seconds. So we're capable to springiness backmost energy, oregon instrumentality it on.
When you're HPC, you person to beryllium up each the time, and truthful you request to person this backup of generators, batteries. Stability of vigor is overmuch much captious for HPC than it is for bitcoin mining. So you person a matrix that you're trying to play with.
Does the Trump administration’s tariff strategy interaction your operations?
We perceive to the U.S. due to the fact that it's truthful important for branding and liquidity. But we ne'er did thing successful the U.S. due to the fact that we're ever acrophobic astir the overreach of regulatory agencies successful Washington. They fundamentally weaponized the auditors to spell aft anyone that was successful crypto. So we said, ‘Let's conscionable enactment neutral successful this jurisdiction.’ Then Trump won, truthful we decided to determination our caput bureau over. That's strategic, due to the fact that if your caput bureau is successful the U.S., you suffice for galore of the assorted indexes. We don’t person mining operations successful the U.S. yet.
But you’ve expanded importantly successful Paraguay.
I deliberation what happened successful Paraguay to Bitfarms is that they went done immoderate distraction with their CEO [left]. There was a vacuum. Then Riot (RIOT) tried to travel successful to bargain and power them. During that turmoil period, the Paraguayan authorities enactment a tariff connected bitcoin miners, which was truly precise weird, but it happened, and it volition driblet away, I think, adjacent year. It was each unsettling for the caller CEO, and helium wanted to pivot to the U.S. So they merged with Stronghold (SDIG) to fundamentally go an American company, similar a reverse takeover.
They inactive person 80 megawatts of energy successful Paraguay, but astir of the operations we're present taking over. We're finishing the construction, and we're precise excited astir it. We already person a fewer machines working. We person the biggest maturation illustration successful 2025 of each the bitcoin miners. We person not done immoderate of these funky convertible debentures to bargain bitcoin. Most of them paid overmuch higher prices. No, we've not done that due to the fact that we cognize however volatile it tin be. Every clip everyone starts doing this binge indebtedness buying — well, before, successful 2021 it was each for buying mining equipment. This time, it's each for buying bitcoin. Bitcoin past goes to a correction, and they each get strangled. We conscionable don't privation to beryllium successful that position.
We truly spot the accidental successful Paraguay. It has the largest dam successful the Western hemisphere, shared 50/50 with Brazil. It’s 14 gigawatts and similar 8 kilometers long. It's truthful immense. If Paraguay doesn't usage the electricity, past Brazil gets to support it. Well, Bitcoin miners don't bash that. We assistance physique retired their infrastructure, and they get paid U.S. dollars each month. So it's a win-win for the Paraguayan authorities and it's a win-win for HIVE shareholders, due to the fact that we privation to enactment focused connected greenish energy.
Are determination different jurisdictions you’re looking to grow to?
We're looking astatine proposals coming from East Africa. Ethiopia successful peculiar has a batch of stranded electricity. Some of the different miners person already gone into that area. They got each this inexpensive wealth from the World Bank and different institutions, and they built the dams, but past they didn't physique the powerfulness lines passim the economy. It’s a large expense. We person a precise wide imaginativeness to spell from 6 EH/s to astir 25 EH/s successful the adjacent 9 months.
How bash you spot the mining industry’s concern close now?
I don't deliberation it's healthy. You person to beryllium cognizant that there's a alteration for a batch of the large miners. Major U.S. corporations are not truly into mining expansion. They’re predominantly focused connected adding bitcoin to their equilibrium sheet. They're each emulating Michael Saylor’s concern model. But for Bitcoin’s ecosystem to function, you request to person maturation successful the nodes. You request to person maturation successful mining operations truthful we go adjacent much decentralized. Some of the companies should beryllium astir apt investing much successful the Lightning Network oregon successful Ordinals infrastructure to differentiate themselves.
What Bitdeer (BTDR) is doing [with ASIC manufacturing] is truly smart. The laminitis was besides a co-founder of Bitmain. So coming successful with a caller portion of exertion which is precise vigor businesslike successful presumption of joules consumed, I deliberation that's precise bully and competitory for the superior markets.
Bitcoin miners are going to spell done a process that happened to the golden miners. When the GLD came retired for bullion, each of a abrupt determination was a separation — golden stocks versus the GLD. This century, golden bullion has outperformed the S&P 500 by a wide margin. But lone the prime golden stocks, the royalty golden stocks, person really outperformed. One of the things that HIVE has ever had is the aged royalty exemplary of precocious gross per employee, truthful that we tin woody with these down drafts and not person to spell done this panic of large layoffs.
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