Earnings Highlights + Construction Updates | The HIVE Newsletter
Welcome to The HIVE newsletter. Today we’re going to go over highlights from HIVE’s fiscal year 2021 earnings report and webcast. Then we’ll cover some construction updates from our New Brunswick data center campus, and finish with HIVE Buzz news updates.
Generated revenue from digital currency mining of $66.7 million, with a gross mining margin of $50.1 million
Mined 595 Bitcoin and over 96,300 Ethereum during the year ended March 31, 2021
Earned net income of $42.5 million for the year
Working capital increased by $86.6 million during the year ended March 31, 2021
Digital currency assets of $57.5 million, as at March 31, 2021
Executive Chairman Frank Holmes began the webcast by reminding investors of the high volatility of the crypto industry. This chart compares various asset classes and their one and ten-day volatility.
This infographic makes it clear that Ethereum, Bitcoin, and HIVE are all highly volatile assets. Frank believes it’s important to set shareholder expectations accurately, and investors should expect high volatility going in.
However, volatile assets also have the potential for impressive returns. Here’s a chart showing HIVE’s share performance between 3/30/2020 and 3/31/2021.
The chart below demonstrates how HIVE has outperformed both Ethereum and Bitcoin for the 12 month period ending August 31st 2021), returning an impressive 863%.
Next up is a slide showing HIVE’s gross income from fiscal years 2019-2021.
HIVE continues to HODL significant crypto reserves, as the graphic below demonstrates. Since we began mining Bitcoin this year, we quickly surpassed 1,000 BTC.
We sold some Ethereum over recent months to cover overhead and capital requirements, but still HODL over 25,000 Ether and continue to ramp up mining in Sweden and Iceland.
You can watch the entire webcast here. Frank, Darcy, and Aydin go into great detail about our strategy going forward.
And here’s one bonus chart from our Twitter, showing how HIVE’s Bitcoin production has grown this year.
HIVE continues to ramp up BTC and ETH production.
The new data center buildings at our New Brunswick, Canada campus are coming along nicely. These state-of-the-art facilities will soon be mining Bitcoin with clean, cheap hydroelectric power.
Construction should be finished around XXX date, which will coincide nicely with our new Bitcoin miners rolling in from prior orders.
Welcome to The HIVE Newsletter, the official newsletter of HIVE Blockchain Technologies Ltd. We’re launching this letter to keep shareholders, and prospective investors, informed about what’s going on at HIVE.
In The Ledger, we’ll be discussing:
Crypto reserve (HODL) updates
This week, let’s talk about our data center and mining strategy.
Why We Own Data Centers + Mining Update
A data center is just a secure building where computer servers are stored. We use data centers to mine cryptocurrency. HIVE currently operates 5 data center campuses, where we are mining Bitcoin and Ethereum. These facilities are in Canada, Sweden, and Iceland. Soon we will be testing a high performance computing (HPC) cloud hosting operation.
At our largest data center campus in New Brunswick, Canada, where we own the land, we are currently building expansions from the ground-up (“greenfield expansions”), which will provide 40 megawatts (“MW”) of data center capacity. This 40 MW is being built in two phases of 20 MW each, which will be completed in Q4 2021 and Q1 2022. HIVE already has 30 MW completed buildings operating at this data center campus in New Brunswick. Upon completion of our construction project here, this data center campus will be 70 MW total, owned and operated by HIVE, one of the largest crypto data center campuses in Canada! Here are some recent pictures of the current 20MW building going up at the site (in the background you can see the existing buildings):
Many of our competitors choose to host their machines at someone else’s data center. We started out doing that, but are now diversifying. We announced the purchase of GPU Atlantic Inc. from GPU.ONE, a leading Canadian data center provider, in April of 2021. That purchase included the New Brunswick Bitcoin mining data center campus, originally expected to be 50 MW of total capacity at time of acquisition, which has since been expanded to a total future capacity of 70MW under HIVE’s leadership.
A 50 MW data center complex is large. It requires a powerful substation to handle the electrical load, and then a series of transformers to convert the electricity to usable voltages. Here’s what HIVE’s 50MW substation looks like in New Brunswick.
Once New Brunswick Building #3 is live, which we expect to happen around November 2021, we’ll be operating 3 data center buildings powered by 50MW. HIVE is also preparing the infrastructure for Building #4 which will provide an additional 20MW (which will require an additional substation), which will bring the campus total to 70MW in calendar Q1 2022.
Here’s what HIVE Executive Chairman Frank Holmes said when we confirmed the purchase of GPU Atlantic Inc. in February of 2021.
“This is an important strategic acquisition for HIVE that diversifies our business significantly and adds one of the industry’s top data centre operators to our ranks, at an opportune time, and at an attractive valuation for our shareholders,” said Frank Holmes, Executive Chairman of HIVE.
“The Acquisition provides us with full ownership of a state of the art and operational Bitcoin mining data centre ready to deploy our incoming next generation bitcoin mining hardware with access to some of the lowest electricity costs in the industry.”
“Additionally, this Acquisition further enables HIVE to continue in its objective of having control of its destiny, including significant capacity for expansion and flexibility for our future operations. We now have a 50 MW data center campus to build up and a home for our new generation Bitcoin miners. We are also very excited about integrating new members of the GPU One team into our ranks and deploying their in-house mining management software into our operations on a global scale,” added Mr. Holmes.
As Frank mentioned, with the acquisition of GPU Atlantic Inc., we also brought on an experienced team of data center and crypto mining experts onto the HIVE team.
Owning and operating data centers is key to our long-term strategy. For one thing, we don’t have to worry about landlords raising the rent at these facilities. And we can choose locations with access to some of the cheapest, greenest, and cleanest power in the world. All of our data centers are powered by clean, low-cost hydroelectric or geothermal power.
Watch HIVE’s newly-appointed President and COO Aydin Kilic explain why owning the data centers is critical in this recent YouTube interview with The Deep Dive. He dives into the value of owning data center campuses, and our construction pipeline. He also explains our crypto reserve policy, and much more.
Data centers are in record demand around the world. Especially since China shut down its domestic crypto mining industry in June of 2021. More than 50% of the entire Bitcoin mining network was based in China, and now all that equipment is looking for new homes.
“We’re seeing a ton of inbound requests from Chinese-based mining companies that are looking to relocate to North America and are looking to do it urgently,” said Perrill. “We’re receiving over a hundred megawatts of requests per day.”
Owning data centers also gives the company optionality in a few ways. For example, if there’s another crypto winter, we could offer hosting while still mining crypto with our own machines, and holding as many of the coins mined as possible.
We believe owning data centers is an excellent way to build long-term value for shareholders. HIVE will be launching a pilot program to test high performance computing (HPC) cloud hosting as a service in the near future. Read more about the company’s HPC strategy in our July 2 update.
At the same time that HIVE is expanding its data center operations, it continues to ramp up crypto mining production. In June we announced the purchase of 3,019 high performance Bitcoin miners from Foundry Group, as covered in Bitcoin Magazine.
And on July 30 we announced a purchase of 4,000 new generation Bitcoin miners. We also continue to have miners roll in from previous orders, and are installing them as fast as possible. Here are some pictures of newly-installed BTC mining machines at our New Brunswick facility.
Additionally, on August 13 2021, HIVE announced an order of 1,800 high-performance Bitcoin miners from Bitmain.
And on September 8 2021 we announced a purchase of 3,000 high performance Bitcoin miners from MicroBT, which will produce 294 PH/s of Bitcoin mining capacity once installed.
Furthermore, on September 10, 2021, HIVE announced a purchase of an additional 2,292 high performance Bitcoin miners from MicroBT, which will produce 229 PH/s of Bitcoin mining capacity.
Therefore, the September orders HIVE has secured with MicroBT will add an additional 523 PH/s of Bitcoin mining capacity once all these machines are installed. This represents a 50% increase to our current Bitcoin mining capacity, which is over 1 Exahash (an Exahash is 1,000 Petahashes)!
We’re also ramping up our Ethereum mining production, because we believe the switch to Proof of Stake (PoS) is still a ways off, and we can continue to profitably mine ETH for some time to come. If and when Ethereum switches to Proof of Stake, that’s when we plan to shift our powerful chips from mining ETH, to powering GPU-intensive HPC cloud hosting.
As of July 30, the company was generating around US$550,000 in income per day, which translates to a $200 million annual run rate. Check out the July 30 update for more on that.
As of September 2 HIVE is operating at 1 Exahash of Bitcoin mining capacity. Here is our monthly BTC production growth since April, as we recently posted on Twitter.
April 64 BTC
May 73 BTC
June 86 BTC
July 200 BTC
August 234 BTC
We now hold 1,030 BTC, valued at approx $46.35 million at $45k per BTC, as of 9/8/2021.
The best recent media featuring HIVE Blockchain Technologies.
I’m Adam and I joined HIVE as a consultant in June. My mission is to keep investors and followers informed about what’s happening at HIVE.
A little bit about me: I’m a long-time cryptocurrency investor and believer. I love writing about and investing in alternative assets such as gold, crypto, and private startups. I’ve known Frank and some of the HIVE team for years, and am thrilled to finally be on board.