Frank Holmes has had an extended profession as a cash supervisor: financing gold mining corporations; getting concerned within the creation of gold royalty corporations; growing monetary merchandise for the airline trade — all of this with U.S. International Buyers (GROW), the publicly-traded asset administration agency he’s been main since 1989.
He’s additionally the chairman of HIVE Digital Applied sciences (HIVE), a bitcoin mining firm with a $345 million market capitalization and a quickly increasing footprint in Paraguay, due to a latest deal during which the agency acquired amenities beforehand owned by one other miner, Bitfarms. The agency was born, he stated, after he tried to launch a spot bitcoin exchange-traded fund (ETF) in 2017.
HIVE has been inexperienced from the get-go. Its first facility used geothermal power in Iceland; one other used hydro-power in Sweden, solely 100 kilometers south of the Arctic Circle. Now, the corporate expects to have roughly 430 megawatts (MW) of infrastructure up and working by the third quarter of 2025 — that means sufficient power to energy a metropolis of 86,000 houses.
Holmes might be talking on the BTC & Mining Summit at Consensus 2025, in Toronto on Might 14-15.
Within the lead-up to the occasion, Holmes shared his ideas about HIVE’s place throughout the broader mining trade, the corporate’s choice to recycle its GPUs for AI functions, and what the long run holds.
This interview has been condensed and edited for readability.
CoinDesk: HIVE has been repurposing a few of its GPUs for AI. Are you able to inform me about that?
Frank Holmes: At one time we had 130,000 AMD chips and we have been mining ether (ETH). We have been about 6% of the world’s ether mining and it was very worthwhile. When that went away [with Ethereum’s transition to Proof-of-Stake in 2022], we had this experience in GPU chips and we changed a number of our AMD chips with Nvidia chips. That allowed us to begin happening the AI path.
The distinction between a primary ASIC miner and Nvidia chips is like driving a Bronco and a Ferrari. The delicacy of the motor, the engines, all of the gearing that goes right into a excessive efficiency automotive — all of that relates way more to a GPU. When Antminers S21 Professionals present up, it takes us six hours to unwrap them and plug them in. When the Nvidia chips present up, like an H100, it’s six weeks earlier than you’ve constructed the mind and it’s working. So it is a utterly totally different talent set.
While you’re constructing infrastructure for bitcoin mining, you are spending one million {dollars} per megawatt of electrical energy. While you go into excessive efficiency computing (HPC), the amenities want a lot redundancy that you just spend $10 million per megawatt. That is excluding the tools. You have acquired a lot greater logistical engineering necessities, and you have got a lot greater capital bills.
While you need to supply power for bitcoin mining, you may take variable power, and the true key half is the price of the power. In Sweden, we are able to go from 30 megawatts to 3 megawatts in 15 seconds. So we’re capable of give again power, or take it on.
While you’re HPC, you need to be up on a regular basis, and so you’ll want to have this backup of mills, batteries. Stability of power is way more vital for HPC than it’s for bitcoin mining. So you’ve got a matrix that you just’re making an attempt to play with.
Does the Trump administration’s tariff technique impression your operations?
We take heed to the U.S. as a result of it is so vital for branding and liquidity. However we by no means did something within the U.S. as a result of we’re at all times involved concerning the overreach of regulatory companies in Washington. They mainly weaponized the auditors to go after anybody that was in crypto. So we stated, ‘Let’s simply keep impartial on this jurisdiction.’ Then Trump received, so we determined to maneuver our head workplace over. That is strategic, as a result of in case your head workplace is within the U.S., you qualify for lots of the varied indexes. We don’t have mining operations within the U.S. but.
However you’ve expanded considerably in Paraguay.
I feel what occurred in Paraguay to Bitfarms is that they went by some distraction with their CEO [left]. There was a vacuum. Then Riot (RIOT) tried to come back in to purchase and management them. Throughout that turmoil interval, the Paraguayan authorities put a tariff on bitcoin miners, which was actually very bizarre, but it surely occurred, and it’ll drop away, I feel, subsequent yr. It was all unsettling for the brand new CEO, and he needed to pivot to the U.S. So that they merged with Stronghold (SDIG) to mainly change into an American firm, like a reverse takeover.
They nonetheless have 80 megawatts of electrical energy in Paraguay, however a lot of the operations we’re now taking up. We’re ending the development, and we’re very enthusiastic about it. We have already got a number of machines working. We now have the most important development profile in 2025 of all of the bitcoin miners. We now have not accomplished any of those funky convertible debentures to purchase bitcoin. Most of them paid a lot greater costs. No, we have not accomplished that as a result of we all know how risky it may be. Each time everybody begins doing this binge debt shopping for — nicely, earlier than, in 2021 it was all for getting mining tools. This time, it is all for getting bitcoin. Bitcoin then goes to a correction, they usually all get strangled. We simply do not need to be in that place.
We actually see the chance in Paraguay. It has the biggest dam within the Western hemisphere, shared 50/50 with Brazil. It’s 14 gigawatts and like eight kilometers lengthy. It is so immense. If Paraguay would not use the electrical energy, then Brazil will get to maintain it. Nicely, Bitcoin miners do not do this. We assist construct out their infrastructure, they usually receives a commission U.S. {dollars} each month. So it is a win-win for the Paraguayan authorities and it is a win-win for HIVE shareholders, as a result of we need to keep targeted on inexperienced power.
Are there different jurisdictions you’re trying to broaden to?
We’re proposals coming from East Africa. Ethiopia particularly has a number of stranded electrical energy. Among the different miners have already gone into that space. They acquired all this low cost cash from the World Financial institution and different establishments, they usually constructed the dams, however then they did not construct the ability strains all through the financial system. It’s an enormous expense. We now have a really clear imaginative and prescient to go from 6 EH/s to about 25 EH/s within the subsequent 9 months.
How do you see the mining trade’s state of affairs proper now?
I do not assume it is wholesome. You must be cognizant that there is a change for lots of the large miners. Main U.S. companies should not actually into mining enlargement. They’re predominantly targeted on including bitcoin to their steadiness sheet. They’re all emulating Michael Saylor’s enterprise mannequin. However for Bitcoin’s ecosystem to perform, you’ll want to have development within the nodes. It’s essential have development in mining operations so we change into much more decentralized. Among the corporations needs to be most likely investing extra within the Lightning Community or in Ordinals infrastructure to distinguish themselves.
What Bitdeer (BTDR) is doing [with ASIC manufacturing] is absolutely sensible. The founder was additionally a co-founder of Bitmain. So coming in with a brand new piece of know-how which could be very power environment friendly when it comes to joules consumed, I feel that is superb and aggressive for the capital markets.
Bitcoin miners are going to undergo a course of that occurred to the gold miners. When the GLD got here out for bullion, abruptly there was a separation — gold shares versus the GLD. This century, gold bullion has outperformed the S&P 500 by a large margin. However solely the standard gold shares, the royalty gold shares, have really outperformed. One of many issues that HIVE has at all times had is the outdated royalty mannequin of excessive income per worker, in order that we are able to cope with these down drafts and never should undergo this panic of huge layoffs.
