As Bitcoin mining enters a brand new chapter post-halving, HIVE Digital Applied sciences is taking a measured, bold strategy to progress.
On this interview, Darcy Daubaras, CFO of HIVE, affords 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 a detailed eye on operational self-discipline.
Daubaras explains how HIVE is balancing pace 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 knowledge facilities to diversify past crypto and construct long-term resilience. Daubaras explains how this twin focus between Bitcoin (BTC) and computing provides HIVE a aggressive edge, particularly as ESG considerations and power prices dictate the winners and losers within the mining business.
For buyers and business watchers, it’s a uncommon glimpse into how one of many sector’s most forward-thinking corporations is positioning itself for the longer term.
Under is the whole Q&A with Darcy Daubaras.
crypto.information: HIVE is endeavor an enormous hashrate growth with the aim of 25 EH/s by late 2025. You already hit 10 EH/s as of Could. Your aim nonetheless represents an additional improve of round 2.5x in capability. What are the largest execution dangers in scaling up this quickly, and the way are you managing these challenges to make sure you meet your 25 EH/s aim on time?
DD: Scaling to 25 EH/s is an bold 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 building timelines.
We actively handle these dangers by a mix of disciplined mission planning, phased deployments, and powerful native execution. Our partnerships with trusted distributors and our native presence at every website present us with important visibility and management at each stage of the buildout.
In Paraguay, as an example, 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. Below his steering, we’re developing high-performance, hydro-powered knowledge centres designed for long-term reliability, grid effectivity, and sustainability. His deep understanding of power techniques ensures that as we scale in South America, we aren’t simply rising shortly, 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 elevate capital if wanted, or can HIVE proceed working in the direction of its targets by operational money movement? Talking of which, how do you determine when to carry mined BTC versus when to liquidate or use it for company wants?
DD: Utilizing Bitcoin from our treasury to fund progress provides us flexibility with out incurring debt; nevertheless, it requires disciplined timing and strong 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 progress. Our aim 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 in your fleet. I’m not going to fake to know what is occurring ‘underneath the hood’, however maybe you possibly can 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 in your wants out of the field or do it’s good to discover additional in-house optimization to enhance effectivity and hash charge 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 progress section. Hydro-cooled ASIC miners are environmentally accountable on account of their superior power effectivity and decreased environmental affect. Liquid cooling requires much less power than conventional air techniques, reducing complete website energy consumption and bettering energy utilization effectiveness.. These techniques additionally get rid of high-speed followers, slicing 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 actually 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, for the reason that 2024 halving, business economics have clearly tightened whereas community problem is at an all-time excessive. With that stated, what margin profile do you count on for HIVE within the coming quarters or full fiscal yr?
DD: Sustainability all through all market cycles is a core side 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 one of the crucial streamlined groups within the business, keep the bottom G&A bills amongst our friends, and are extremely disciplined in our capital allocation. This effectivity retains our price construction aggressive, enabling us to remain worthwhile even when Bitcoin falls beneath $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 knowledge facilities finally servicing a bigger share of AI, machine studying, or different cloud workloads as a hedge in opposition to crypto cycles, and may this change into a major income stream or aggressive benefit for HIVE in the long term?
DD: Our entry into HPC and AI cloud companies isn’t a pivot. In truth, 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 knowledge centre infrastructure more and more change into nationwide safety priorities, we see huge tailwinds driving demand for trusted, inexperienced compute.
That is additionally sensible threat administration. When crypto markets soften, AI compute demand stays strong. Over time, we count on our inexperienced knowledge centres to energy each the blockchain and AI economies. That twin engine provides HIVE a sustainable aggressive benefit and a pathway to long-term, diversified income progress.
CN: How are you getting ready for potential downturns or sudden shocks within the Bitcoin market? Do you make the most of any hedging methods to guard in opposition to worth swings, or is HIVE basically absolutely uncovered to Bitcoin with confidence that low prices and a powerful stability sheet will carry you thru any bear market? Or, do you simply HODL and hope for one of the best?
DD: Our perception within the long-term worth of the Bitcoin community is central to our technique. Nevertheless, we handle threat by structural benefits akin to 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 progress, however we’re not pressured sellers. Our philosophy is easy: robust stability sheet, environment friendly operations, and long-term conviction.
CN: The Bitcoin mining sector as a complete is underneath rising ESG scrutiny from regulators, environmental teams, and even buyers 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 at the moment are eager to show their local weather credentials. In your view, is the business doing sufficient to handle these considerations? How is HIVE contributing to bettering the narrative round Bitcoin mining’s environmental affect?
DD: The ESG debate in mining is legitimate, but it surely 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 business should lead with transparency, correct emissions knowledge, and proactive grid integration. We’re additionally working to shift the narrative: Bitcoin mining can present a web profit to power techniques by stabilizing grids, monetizing stranded energy, and supporting native communities. At HIVE, we help that declare with motion and funding.
CN: Do you anticipate a shakeout forward, the place higher-cost or over-leveraged miners wrestle and community progress slows? How does an organization like HIVE place itself on this state of affairs? Are you getting ready to seize market share from potential drop-outs, and even to accumulate property/gear from distressed miners?
DD: A shakeout shouldn’t be solely seemingly, but additionally wholesome. The post-halving panorama has separated environment friendly operators from the remainder, and HIVE is uniquely positioned to profit. We run lean, keep away from leverage, and function at scale utilizing renewable energy. If distressed property 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 strategy website choice and power procurement? Along with your giant 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 are feeling your present combine already supplies a aggressive sufficient power price 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 a perfect location in your operation, why not base 100% of your operation there? What precisely is the good thing about geographical diversification?
DD: Paraguay is politically secure and affords ample hydropower, which is why we selected to take a position there. Nevertheless, like all jurisdiction, dangers exist. These embrace regulatory adjustments, limitations in grid infrastructure, and regional commerce dynamics. We have now constructed robust 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 aim is world resilience; whereas Paraguay is our flagship, our operational playbook stays multi-site and multi-country.
CN: Some buyers see (Micro)Technique primarily as a proxy for Bitcoin publicity moderately than a software program firm. On condition that HIVE additionally holds BTC on its stability sheet and now runs knowledge facilities and HPC operations, how would you like buyers to view HIVE? Are you principally one half miner, one half digital asset infrastructure play, or a de facto Bitcoin ETF? Do you are feeling the necessity to market your self as a extra balanced various to Technique’s ‘infinite cash glitch’ fame?
DD: HIVE is a brand new breed of Bitcoin infrastructure firm. Lengthy earlier than the most recent wave of company Bitcoin adopters, HIVE grew to become the primary public firm to carry BTC on its stability 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. Take into account us as a inexperienced knowledge 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 buyers with diversified publicity to each decentralized networks and the compute layer powering the following technology of innovation.
CN: Do you suppose there’s any room for strategic collaboration (or outright acquisitions) between mining corporations and treasury-heavy firms like Technique? Have you ever been approached by Technique for any discussions? Or are you too essentially 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 car, however our fashions are essentially completely different. As a conventional Bitcoin miner, we differ from Technique in that we generate Bitcoin by securing the community by 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 by 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.
