Despite the recent pullback, the Nasdaq 100 (QQQ) is only down about 7% over the last 12 months (as of 6/3/2022, closing prices).
But certain areas within tech have seen much sharper drawdowns. Look at Cathie Wood’s Ark Innovation ETF, which performed brilliantly for years prior to the last one. It’s down 59% over the past 12 months.
The nascent crypto mining sector has been hit even harder.
Over the last year HIVE Blockchain (HIVE) shares are down about 64% (split-adjusted). Needless to say, none of us are satisfied with that. But the broader sector has been hit hard as well. Here’s the drop in share price for some of our competitors over the same period (last 12 months as of 6/3/2022).
- RIOT Blockchain (RIOT) shares are down 78%
- Hut 8 (HUT) is down 42%
- Marathon (MARA) shares are down 63%
- Bitfarms (BITF) is down around 57%
(all data via Yahoo Finance 1 year chart, daily closing price)
Investor appetite for crypto miners has dwindled, for now.
Of course, much of this pullback is likely due to underlying prices of crypto assets falling. Bitcoin is now down about 23% over the past year, and Ethereum is down about 34%. Crypto miners have at times outperformed the underlying assets (BTC and/or ETH) during bull markets, but the flipside is the potential to underperform during corrections.
HIVE is focused on executing our business strategy, which is to sustainably grow into a leading crypto infrastructure provider.
In HIVE’s just-released May production update, we released the following monthly stats.
- 273.4 BTC Produced
- 2,694 ETH Produced*
- 2.15 Exahash of Bitcoin mining capacity at beginning of May
- Increased to 2.18 Exahash of Bitcoin mining capacity at end of May
- 6.26 Terahash of Ethereum mining capacity at end of May
*The Company’s production of ETH from GPU mining (including selective optimizations of GPU hashrate) has yielded a total ETH production of 2,694 ETH.
I believe HIVE has executed its strategy well, and it shows on the top and bottom lines. It shows in the new construction, and the installations and activations despite brutal supply chain conditions.
Additionally, the company has managed to scale its operations significantly while achieving high profitability, which is a rare feat in the equity world.
Bear Market Performance Matters
We believe that how a Bitcoin miner performs during corrections and bear markets matters. This was well explained in a recent article by independent crypto analyst Anthony Power titled How to Value Bitcoin Mining Companies.
“A lot of new companies are popping up in Bitcoin mining, banking on the simplistic model of plug-in-to-profit. However, it’s far more sophisticated than first-glance would indicate. Deploying one miner is not the same as managing 10,000 miners at a large facility. To also keep miners economical during the bear markets, moreover, is a business where experience really matters.”
I couldn’t have said it better. We’ve been running mining sites since 2017, and have learned much over that five years. Today we have a team of mining pros with deep experience running operations.
The value of the company’s crypto holdings (ETH + BTC) is approximately $122 million, as of June 6, 2022.
In our May production update, HIVE announced that the company sold approximately 10,000 Ethereum (ETH) tokens recently. The HIVE executive team used this cash to fund the Bitcoin miner deal with Intel, which was announced March 7, 2022. For more details check out the full June 6th release of our May Production Update.
No matter what the market throws at us, HIVE will keep moving forward.
Editor, The HIVE Newsletter
P.S. – HIVE is attending Consensus 2022 in Austin June 9 – 11! Come say hi at booth # 610.