Frank Holmes has had an extended profession as a cash supervisor: financing gold mining firms; getting concerned within the creation of gold royalty firms; creating monetary merchandise for the airline business — 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 Blockchain Applied sciences (HIVE), a bitcoin mining firm with a $345 million market capitalization and a quickly increasing footprint in Paraguay, because of a latest deal by which the agency acquired services 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 vitality 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 operating by the third quarter of 2025 — that means sufficient vitality to energy a metropolis of 86,000 properties.
Holmes can be talking on the BTC & Mining Summit at Consensus 2025, in Toronto on Could 14-15.
Within the lead-up to the occasion, Holmes shared his ideas about HIVE’s place inside the broader mining business, the corporate’s choice to recycle its GPUs for AI functions, and what the longer term 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 had been mining ether (ETH). We had 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 loads of our AMD chips with Nvidia chips. That allowed us to begin happening the AI path.
The distinction between a fundamental 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 automobile — all of that relates far more to a GPU. When Antminers S21 Execs 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 ability 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 services want a lot redundancy that you simply spend $10 million per megawatt. That is excluding the tools. You have obtained a lot greater logistical engineering necessities, and you have a lot greater capital bills.
While you need to supply vitality for bitcoin mining, you may take variable vitality, and the true key half is the price of the vitality. In Sweden, we are able to go from 30 megawatts to 3 megawatts in 15 seconds. So we’re capable of give again vitality, or take it on.
While you’re HPC, you must be up on a regular basis, and so you must have this backup of turbines, batteries. Stability of vitality is far more crucial for HPC than it’s for bitcoin mining. So you might have a matrix that you simply’re making an attempt to play with.
Does the Trump administration’s tariff technique impression your operations?
We hearken 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 all the time involved concerning the overreach of regulatory businesses in Washington. They mainly weaponized the auditors to go after anybody that was in crypto. So we stated, ‘Let’s just stay neutral in 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, nevertheless it occurred, and it’ll drop away, I feel, subsequent yr. It was all unsettling for the brand new CEO, and he wished 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 just a few machines working. We’ve got the most important progress profile in 2025 of all of the bitcoin miners. We’ve got not performed any of those funky convertible debentures to purchase bitcoin. Most of them paid a lot greater costs. No, we have not performed that as a result of we all know how risky it may be. Each time everybody begins doing this binge debt shopping for — properly, earlier than, in 2021 it was all for purchasing mining tools. This time, it is all for purchasing bitcoin. Bitcoin then goes to a correction, and so they 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 does not use the electrical energy, then Brazil will get to maintain it. Properly, Bitcoin miners do not do this. We assist construct out their infrastructure, and so they 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 centered on inexperienced vitality.
Are there different jurisdictions you’re seeking to develop to?
We’re taking a look at proposals coming from East Africa. Ethiopia particularly has loads of stranded electrical energy. A number of the different miners have already gone into that space. They obtained all this low cost cash from the World Financial institution and different establishments, and so they constructed the dams, however then they did not construct the ability traces all through the financial system. It’s a giant expense. We’ve got 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 business’s scenario proper now?
I do not assume it is wholesome. You need to be cognizant that there is a change for lots of the massive miners. Main U.S. firms usually are not actually into mining growth. They’re predominantly centered on including bitcoin to their stability sheet. They’re all emulating Michael Saylor’s enterprise mannequin. However for Bitcoin’s ecosystem to operate, you must have progress within the nodes. You must have progress in mining operations so we change into much more decentralized. A number of the firms must be in all probability investing extra within the Lightning Community or in Ordinals infrastructure to distinguish themselves.
What Bitdeer (BTDR) is doing [with ASIC manufacturing] is de facto good. The founder was additionally a co-founder of Bitmain. So coming in with a brand new piece of expertise which may be very vitality environment friendly when it comes to joules consumed, I feel that is excellent 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, impulsively 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 truly outperformed. One of many issues that HIVE has all the time had is the previous royalty mannequin of excessive income per worker, in order that we are able to take care of these down drafts and never should undergo this panic of huge layoffs.
