Hive Blockchain Technologies’ (HIVE.V) quadruples in two months, owes success to ethereum mining

Hive Blockchain Technologies’ (HIVE.V) prospects are looking up and now they anticipate a 40% reduction in the company’s operating and maintenance costs for its GPU (graphics processing unit) ethereum mining facility in Sweden.

The company’s new costs are comparable to what they were paying under their previous service provider agreement, which ended in November 2019. The company locked in a lower-than-anticipated electricity rate, courtesy of a unusually warm winter in Sweden, for a majority the company’s electricity costs by utilizing agreements that will continue through 2020.

“We’re extremely pleased to have locked in advantageous electricity prices in Sweden through our direct agreements with local suppliers, the result of Hive assuming full control of its Sweden operations in November. This provides cost certainty and allows us to plan for our next stage of growth. It is another successful step in our efforts to increase our underlying mining profitability in 2020,” said Frank Holmes, interim executive chairman of Hive.

Mining with GPU’s has a different cost metric than most proof-of-work mining. Proof-of-work, like those done with Bitcoin, Bitcoin Cash, and until they complete the transition to Proof-of-Stake, Ethereum, involves energy guzzling server farms which then require extra equipment like air conditioners to keep them cool. It’s not that GPU’s don’t get hot—they do, but they’re often cooled by an internal fan or some variety of non-high performance fan.

Electricity is Hive’s biggest economic concern, but in comparison, GPU mining can be done by you and I, at home in our underwear, aided by a series of high performance computers and a few household fans. They do it at scale.

Hive’s recent run

Hive’s been on a bit of a run lately, as evidence by their chart.

Hive chart courtesy of

Consider these two charts as a point of comparison. They’re not exactly identical, but there is definitely a relationship. Yes. This company was selling for $0.10 as 2020 rolled in, but they’re at $0.45 today.

Ethereum chart courtesy of

I’m absolutely loathe to infer causation from correlation, so here’s Holmes to do it:

“For the past two years, Hive’s share price has been relatively correlated to the price of Ethereum, in part due to traders using our publicly listed and relatively liquid shares as a proxy for holding the cryptocurrency. That correlation unfortunately became decoupled last spring following our proxy battle. However, we are pleased that, thus far in 2020, our efforts through 2019 to assume control of and improve our mining operations, combined with the increasing adoption of the Ethereum blockchain and increasing investor interest in cryptocurrencies and blockchain technology, has resulted in similar investor interest in Hive.”

Hive is one of the world’s largest public miners of Ethereum. Their Swedish facility includes the majority of their current mining operations, and the rest is involved in a smaller GPU mining facility in Iceland. The company has kicked around the idea of improving the profitability of their Iceland facility, or maybe relocating its GPU mining equipment there to take advantage of the lower cost of production.

Either way, as far as cryptocurrency miners go, Hive is going to be one to watch in the coming months.

—Joseph Morton

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