HIVE Digital Technologies Ltd. (TSXV: HIVE) (NASDAQ: HIVE) (FSE: YO0) made USD$30.1 million in Q1 by mining 830 Bitcoin with a gross operating margin of 38 per cent, representing USD$11.3 million in income.
The company said on Monday that this operating margin represents a 146 per cent income bump over the previous quarter, which represented USD$4.6 million.
This quarter the rally in Bitcoin strengthened Bitcoin mining economics, possibly influenced by the news surrounding Bitcoin ETFs in the United States and the subsequent SEC approval on January 10, 2024.
Additionally, the company generated USD$900,000 in revenue this quarter from its GPU-powered High Performance Computing business unit. Hive uses its GPUs for AI computations, which include inference and fine-tuning of large language models.
The company observes that this quarter, HIVE’s production of 830 Bitcoin represents a 5 per cent year-over-year increase compared to mining 787 Bitcoin in the same period last year.
Achieving this growth involves boosting HIVE’s global hashrate to over 4 Exahash per second (EH/s). Additionally, there’s been an approximately 82 per cent increase in Bitcoin mining network difficulty. This increase indicates heightened competition among miners using more efficient equipment for the same daily opportunity of 900 Bitcoin.
“At this stage in the four-year Halving cycle which is embedded in the bitcoin algorithm to slow the supply and eventually cap the total supply at 21 million Bitcoin, we are focused on being prepared for the upcoming Halving in April 2024 while building our HPC AI revenue strategy with our Nvidia chips,” Frank Holmes, Hive’s executive chairman, said.
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Hive anticipates Bitcoin mining difficulty and hashrates at all-time highs
In the quarter ending December 31, 2023, HIVE increased its average cost of production per bitcoin by 2.37 per cent, reaching USD$22,607, compared to the previous quarter ending September 30, 2023.
Bitcoin mining hashrates and difficulty are at all-time highs, which translates to fewer Bitcoin rewarded. The company believes the industry will likely witness a cost increase for the production for Bitcoin.
Cost of production per Bitcoin breaks down into the electricity cost for mining and the efficiency of application specific integrated circuit (ASIC) miners.
HIVE has actively worked to lower its cost of Bitcoin production through a significant fleet upgrade of ASICs. The company aims for a global fleet efficiency of 25 J/TH once it delivers and installs all Bitmain S21 Antminers.
HIVE previously announced the purchase of 1.4 EH/s of machines, scheduled for delivery from January through June 2024. The company remains focused on acquiring new ASIC machines opportunistically from cash flow and managing its balance sheet. HIVE is currently busy preparing for the halving, similar to its preparations in 2020.
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