As Bitcoin mining enters a brand new chapter post-halving, HIVE Digital Applied sciences is taking a measured, formidable method to development.
On this interview, Darcy Daubaras, CFO of HIVE, presents an inside have a look at how the corporate plans to scale its hashrate to 25 EH/s by the top of 2025 whereas sticking to its no-debt philosophy and maintaining an in depth eye on operational self-discipline.
Daubaras explains how HIVE is balancing velocity with sustainability.
It’s fascinating to notice that HIVE’s story isn’t nearly mining. The corporate has additionally made an early transfer into AI and high-performance cloud companies, utilizing its inexperienced information facilities to diversify past crypto and construct long-term resilience. Daubaras explains how this twin focus between Bitcoin (BTC) and computing offers HIVE a aggressive edge, particularly as ESG issues and power prices dictate the winners and losers within the mining trade.
For traders and trade watchers, it’s a uncommon glimpse into how one of many sector’s most forward-thinking companies is positioning itself for the long run.
Under is the entire Q&A with Darcy Daubaras.
crypto.information: HIVE is endeavor an enormous hashrate growth with the objective of 25 EH/s by late 2025. You already hit 10 EH/s as of Could. Your objective nonetheless represents an additional enhance of round 2.5x in capability. What are the most important execution dangers in scaling up this quickly, and the way are you managing these challenges to make sure you meet your 25 EH/s objective on time?
DD: Scaling to 25 EH/s is an formidable goal, however we’re firmly on monitor. Nevertheless, speedy growth at this scale naturally introduces execution dangers, together with world provide chain volatility, {hardware} logistics, and tight development timelines.
We actively handle these dangers via a mix of disciplined undertaking planning, phased deployments, and robust native execution. Our partnerships with trusted distributors and our native presence at every web site present us with vital visibility and management at each stage of the buildout.
In Paraguay, as an illustration, our operations are led by Nation President Gabriel Lamas, a seasoned electrical engineer with over 20 years of expertise in large-scale infrastructure and power tasks all through Latin America. Underneath his steering, we’re developing high-performance, hydro-powered information centres designed for long-term reliability, grid effectivity, and sustainability. His deep understanding of power methods ensures that as we scale in South America, we’re not simply rising rapidly, however with precision and resilience.
CN: Are there any financing challenges to scaling your operation, contemplating your ‘no debt’ stance? Will you deploy extra of your Bitcoin treasury or increase capital if wanted, or can HIVE proceed working in the direction of its targets via operational money move? Talking of which, how do you resolve when to carry mined BTC versus when to liquidate or use it for company wants?
DD: Utilizing Bitcoin from our treasury to fund development offers us flexibility with out incurring debt; nevertheless, it requires disciplined timing and sturdy treasury administration. Given Bitcoin’s historic volatility, we’re cautious to construction transactions that present draw back safety and potential buybacks. We solely deploy BTC when it presents clear, accretive development. Our objective is all the time to safeguard long-term upside whereas responsibly funding accretive growth.
CN: HIVE has aggressively invested in next-gen mining {hardware}, such because the S21+ Hydro ASICs to your fleet. I’m not going to fake to grasp what is occurring ‘beneath the hood’, however maybe you may clarify how these state-of-the-art, hydro-cooled machines give HIVE an edge over opponents by way of efficiency or unit economics? Are these instruments adequate to your wants out of the field or do you should discover additional in-house optimization to enhance effectivity and hash fee density?
DD: The S21+ Hydro ASICs symbolize a serious leap ahead in mining effectivity, and we’ve made a deliberate guess on this know-how as a cornerstone of our subsequent development section. Hydro-cooled ASIC miners are environmentally accountable as a consequence of their superior power effectivity and diminished environmental affect. Liquid cooling requires much less power than conventional air methods, reducing complete web site energy consumption and enhancing energy utilization effectiveness.. These methods additionally eradicate high-speed followers, chopping noise air pollution and making them extra appropriate for group integration. The secure thermal surroundings extends gear life, lowering digital waste. Moreover, hydro-cooled setups are sometimes paired with renewable power sources like hydropower, additional minimizing carbon footprint. Collectively, these components make hydro-cooled miners a extra sustainable alternative for accountable Bitcoin mining operations.
At HIVE, we see {hardware} as only one a part of the equation. It’s the way you deploy, tune, and handle that {hardware}, particularly at scale, that basically units leaders aside. As such, we’ve developed proprietary firmware optimizations that fine-tune voltage and frequency settings to push efficiency past manufacturing unit specs whereas sustaining power effectivity.
CN: HIVE reported an approximate 35% gross working margin in fiscal 2024. Nevertheless, because the 2024 halving, trade economics have clearly tightened whereas community problem is at an all-time excessive. With that mentioned, what margin profile do you count on for HIVE within the coming quarters or full fiscal 12 months?
DD: Sustainability all through all market cycles is a core facet of our technique. At a Bitcoin worth of $120K, our gross mining margin is roughly 65%, with a breakeven hash worth near $20. Nonetheless, we function with some of the streamlined groups within the trade, keep the bottom G&A bills amongst our friends, and are extremely disciplined in our capital allocation. This effectivity retains our value construction aggressive, enabling us to remain worthwhile even when Bitcoin falls under $100K.
CN: How does your diversification into GPU cloud companies or AI computing complement your core Bitcoin mining enterprise, or is that this only a pure growth? Do you envision HIVE’s inexperienced information facilities ultimately servicing a bigger share of AI, machine studying, or different cloud workloads as a hedge towards crypto cycles, and might this develop into a big income stream or aggressive benefit for HIVE in the long term?
DD: Our entry into HPC and AI cloud companies isn’t a pivot. The truth is, HIVE was the primary Bitcoin miner to launch an AI technique, seizing the chance proper after Ethereum transitioned to proof-of-stake. We repurposed our GPU infrastructure early and intentionally, providing high-performance, sovereign AI compute to enterprises, analysis establishments, and different mission-critical customers.
That foresight is paying off as BUZZ HPC is already reaching income milestones forward of schedule. As AI and information centre infrastructure more and more develop into nationwide safety priorities, we see huge tailwinds driving demand for trusted, inexperienced compute.
That is additionally good threat administration. When crypto markets soften, AI compute demand stays sturdy. Over time, we count on our inexperienced information centres to energy each the blockchain and AI economies. That twin engine offers HIVE a sustainable aggressive benefit and a pathway to long-term, diversified income development.
CN: How are you getting ready for potential downturns or surprising shocks within the Bitcoin market? Do you make the most of any hedging methods to guard towards worth swings, or is HIVE primarily totally uncovered to Bitcoin with confidence that low prices and a powerful steadiness sheet will carry you thru any bear market? Or, do you simply HODL and hope for the perfect?
DD: Our perception within the long-term worth of the Bitcoin community is central to our technique. Nevertheless, we handle threat via structural benefits reminiscent of minimal debt, low working prices, and versatile treasury administration. Our fleet is designed to endure downturns with self-discipline. We could monetize BTC when it facilitates accretive development, however we’re not compelled sellers. Our philosophy is simple: sturdy steadiness sheet, environment friendly operations, and long-term conviction.
CN: The Bitcoin mining sector as an entire is beneath rising ESG scrutiny from regulators, environmental teams, and even traders involved about power consumption and carbon emissions. We’ve seen some jurisdictions take into account moratoriums or bans on mining (Paraguay’s debate being one instance), and miners are actually eager to show their local weather credentials. In your view, is the trade doing sufficient to deal with these issues? How is HIVE contributing to enhancing the narrative round Bitcoin mining’s environmental affect?
DD: The ESG debate in mining is legitimate, nevertheless it typically lacks nuance. HIVE has all the time been a renewable-first miner. Since our inception, we’ve prioritized inexperienced power in Iceland, Sweden, Canada, and now Paraguay. We imagine the trade should lead with transparency, correct emissions information, and proactive grid integration. We’re additionally working to shift the narrative: Bitcoin mining can present a web profit to power methods by stabilizing grids, monetizing stranded energy, and supporting native communities. At HIVE, we assist that declare with motion and funding.
CN: Do you anticipate a shakeout forward, the place higher-cost or over-leveraged miners wrestle and community development slows? How does an organization like HIVE place itself on this situation? Are you getting ready to seize market share from potential drop-outs, and even to accumulate belongings/gear from distressed miners?
DD: A shakeout is just not solely doubtless, but additionally wholesome. The post-halving panorama has separated environment friendly operators from the remainder, and HIVE is uniquely positioned to learn. We run lean, keep away from leverage, and function at scale utilizing renewable energy. If distressed belongings enter the market, we’ll be opportunistic, however provided that they meet our stringent ROI and ESG standards. This can be a cycle the place resilience prevails, and that’s the place we’ve targeted our technique.
CN: How does HIVE method web site choice and power procurement? Together with your massive Paraguay hydro tasks, it appears you’ve locked in comparatively low-cost, renewable energy. Are you taking a look at different geographies with low cost energy for future growth, or do you’re feeling your present combine already supplies a aggressive sufficient power value profile?
DD: Vitality is essential in mining, and we’re exact in how we assess jurisdictions. We search low-cost renewable power, regulatory stability, and grid reliability. Paraguay meets all these standards and extra, which is why it’s now a key a part of our world fleet. Nevertheless, we’re not pausing right here. We’re actively investigating additional alternatives, as diversification aids us in mitigating geopolitical and operational dangers whereas securing low-cost power for the long run.
CN: Curious as a follow-up from the earlier query, if Paraguay is such an excellent location to your operation, why not base 100% of your operation there? What precisely is the advantage of geographical diversification?
DD: Paraguay is politically secure and presents plentiful hydropower, which is why we selected to speculate there. Nevertheless, like every jurisdiction, dangers exist. These embody regulatory adjustments, limitations in grid infrastructure, and regional commerce dynamics. We have now constructed sturdy relationships with the federal government and work carefully with native utilities to make sure alignment. By investing in grid upgrades and growing native expertise, we’re serving to to construct long-term resilience into our operations. Nonetheless, our objective is world resilience; whereas Paraguay is our flagship, our operational playbook stays multi-site and multi-country.
CN: Some traders see (Micro)Technique primarily as a proxy for Bitcoin publicity relatively than a software program firm. On condition that HIVE additionally holds BTC on its steadiness sheet and now runs information facilities and HPC operations, how would you like traders to view HIVE? Are you mainly one half miner, one half digital asset infrastructure play, or a de facto Bitcoin ETF? Do you’re feeling the necessity to market your self as a extra balanced various to Technique’s ‘infinite cash glitch’ status?
DD: HIVE is a brand new breed of Bitcoin infrastructure firm. Lengthy earlier than the most recent wave of company Bitcoin adopters, HIVE turned the primary public firm to carry BTC on its steadiness sheet. In lots of respects, we helped outline the Bitcoin treasury mannequin.
Nevertheless, we’re not merely a hashrate story or a BTC proxy. We’re constructing renewable-powered digital infrastructure with two distinct, complementary monetization layers: Bitcoin mining and high-performance computing. Think about us as a inexperienced information centre enterprise working on the intersection of blockchain and AI.
In contrast to firms specializing in short-term quarters, HIVE is devoted to constructing sustainable infrastructure for many years to return. We’re creating long-term monetary and digital sovereignty whereas offering traders with diversified publicity to each decentralized networks and the compute layer powering the following era of innovation.
CN: Do you suppose there’s any room for strategic collaboration (or outright acquisitions) between mining companies and treasury-heavy firms like Technique? Have you ever been approached by Technique for any discussions? Or are you too basically completely different on reverse sides of the Bitcoin ecosystem to create any synergies?
DD: We respect what Technique has constructed as a treasury-focused BTC automobile, however our fashions are basically completely different. As a standard Bitcoin miner, we differ from Technique in that we generate Bitcoin by securing the community via high-performance computing infrastructure. Our enterprise mannequin depends on operational effectivity and power technique. In distinction, Technique is a software program firm that holds Bitcoin as a treasury asset. They achieve publicity via purchases, not manufacturing. Whereas each fashions profit from Bitcoin appreciation, miners actively contribute to the ecosystem, whereas Technique is primarily a strategic investor.. Whereas we haven’t had direct discussions with them so far, we’re all the time open to exploring strategic partnerships in the event that they create worth for shareholders and align with our ethos of operational self-discipline.
