In a strategic move to enhance its Bitcoin mining operations, HIVE Digital Technologies Ltd. (TSXV: HIVE) (NASDAQ: HIVE) (FSE: YO0), a leader in digital asset mining and green data center operations, has announced a significant purchase of 4,800 Bitmain S19k Pro ASIC miners. The acquisition, detailed in a recent news release, is a part of the company’s ongoing strategy to improve its mining efficiency and profitability, particularly in anticipation of the upcoming Bitcoin Halving event.
Hives strategic expansion and efficiency improvement
HIVE’s latest investment in Bitmain S19k Pro ASIC miners, valued for their high efficiency, is expected to substantially upgrade a portion of the company’s mining fleet. The upgrade aims to enhance the average joules per terahash (J/TH) efficiency, a critical measure of mining performance. The company anticipates that these new miners will be operational within 30 days, allowing for a quicker cash flow compared to previous models.
The company’s strategic goal is to upgrade its existing 38 J/TH miners to more efficient 23 J/TH models before the Bitcoin Halving, projected to occur in late April 2024. The Halving event, which reduces the reward for mining new blocks, is a significant occurrence in the Bitcoin ecosystem, typically resulting in increased mining difficulty. By improving the efficiency of its mining hardware, HIVE aims to maintain profitability even as the rewards for mining decrease.
HIVE’s management team, leveraging their experience from the last Bitcoin Halving in 2020 and the Ethereum Merge in 2022, is focusing on cost-effective capital deployment to maximize returns on their investments in ASIC machines. The approach includes further purchases of high-efficiency ASIC miners to continually upgrade and expand their mining fleet.
Financial prudence and shareholder value
In the last six months, HIVE has acquired 8,900 new-generation ASICs, including models such as the Bitmain S19 XP and S19k Pro, known for their high efficiencies of approximately 22 J/TH and 23 J/TH, respectively. These acquisitions were made with a focus on quick delivery and attractive cost-per-terahash rates. HIVE’s strategy is centered on maximizing cash flow return on invested capital for Bitcoin ASICs, thereby creating value for its shareholders.
The company’s prudent financial strategy was particularly evident last November following the FTX scandal. HIVE capitalized on the market situation by purchasing 3,570 S19j Pro miners at a low cost of $11/TH. These machines were swiftly installed and have since generated substantial cash flow, covering nearly 90% to 120% of their purchase price after accounting for electrical operating costs.
Currently, HIVE maintains about 1% of the global Bitcoin network, producing over 9 Bitcoins per day with an ASIC operating capacity of 4.1 EH/s. The addition of the new 4,800 S19k Pro ASICs is expected to further increase the operating hash rate.
In comparison to other major Bitcoin miners in the US, which have averaged over 65% shareholder dilution in the past year to expand their fleets, HIVE has managed to acquire over 23,000 new Bitcoin mining ASICs in the same period with only a 5% dilution. The impressive feat includes the purchase of HIVE BuzzMiners, along with various Bitmain models, contributing to a 70% increase in their Bitcoin ASIC hash rate from 2.4 EH/s in November 2022 to 4.1 EH/s as of November 2023.
Conclusion
HIVE Digital Technologies Ltd. has strategically enhanced its Bitcoin mining operations with high-efficiency ASIC miners, focusing on profitability and efficiency, especially in light of the upcoming Bitcoin Halving. The company’s commitment to green energy, financial prudence, and shareholder value positions it as a progressive and sustainable leader in the digital asset mining industry, well-prepared for future challenges and opportunities in the cryptocurrency and blockchain space.
