HIVE Secures Abundant LATAM Energy for Bitcoin Mining Expansion
While many crypto companies look towards a US return, HIVE Digital Technologies is strategically focusing on the potential within the Latin American market. This move is driven by a search for stable, low-cost energy essential for efficient Bitcoin mining operations.
Why HIVE Chose Paraguay for Energy Partnership
HIVE’s President and CEO, Aydin Kilic, highlights Paraguay as a key long-term partner. The country offers a compelling combination of factors:
- Geopolitical Stability: Provides a predictable environment for long-term investment.
- Low-Cost Hydro Energy: Abundant clean energy from hydroelectric sources significantly reduces operational costs for mining.
- Open Government: A welcoming stance towards foreign investment supports business growth.
This strategic decision saw HIVE acquire Bitfarms’ 200 MW facility in Yguazú for $56 million. Phase 1, a 100 MW data center supporting 5 EH/s, is already operational. HIVE plans significant expansion, targeting 300 MW in Paraguay by 2025 and aiming for a total hashrate of 25 exahash per second (EH/s) by September.
Building Local Relationships in Paraguay
Success in a new region depends on strong local ties. HIVE has invested over a year cultivating relationships with stakeholders in Paraguay. This involves local hiring, training programs, and building vendor partnerships. The goal is to create a supportive local ecosystem. This helps keep costs stable and boosts operational uptime and efficiency. While there was discussion about a potential crypto mining ban due to grid pressure, HIVE is actively engaging with policymakers to support clear legislation for the sector.
Global Diversification and Hedging Risk
HIVE operates data centers across Canada, Sweden, and now Paraguay. This global footprint creates a balanced presence designed to be resilient against geopolitical or trade policy shocks. The company’s growing presence in both North and South America is a deliberate strategy to hedge against single-region dependencies. This is particularly relevant given concerns like potential tariffs on mining equipment sourced from certain regions.
Securing Equipment and Scaling Hashrate
To support its ambitious scaling plans, including reaching 25 EH/s, HIVE has focused on securing key resources. They have locked in significant ASIC orders and secured power access through long-term power purchase agreements (PPAs). Furthermore, expanding engineering capacity across three continents helps manage market and technological uncertainties.
Profitability in Bitcoin Mining
Aydin Kilic describes Bitcoin mining profitability as fundamentally a physics equation focused on inputs and outputs. Controlling variables like operational expenses, power costs, and machine uptime is crucial for predictable results. Maximizing energy efficiency, minimizing downtime, and disciplined treasury management are key strategies for profitability, whether running a small or large operation. HIVE’s focus on low-cost LATAM energy is a direct application of this principle.
The Importance of Clean Energy
HIVE sees Paraguay as a long-term clean energy partner. The reliance on hydroelectric power aligns with growing industry interest in sustainable mining practices. This focus not only potentially lowers costs but also addresses environmental considerations increasingly important to investors and the public.
Summary
HIVE Digital Technologies’ expansion into Paraguay represents a strategic move to leverage stable, low-cost hydroelectric power for significant Bitcoin mining growth. By focusing on Latin America, building local partnerships, and maintaining a diversified global presence, HIVE aims to enhance profitability and resilience in the competitive mining landscape. Their approach underscores the critical role of energy access and cost management in the success of large-scale mining operations.
