Frank Holmes has had a protracted profession as a cash supervisor: financing gold mining firms; getting concerned within the creation of gold royalty firms; growing monetary merchandise for the airline trade — all of this with U.S. International Traders (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, because of a latest deal wherein the agency acquired services beforehand owned by one other miner, Bitfarms. The agency was born, he mentioned, 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 properties.
Holmes might 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 trade, the corporate’s determination 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 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 plenty 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 way 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 talent set.
Once you’re constructing infrastructure for bitcoin mining, you are spending 1,000,000 {dollars} per megawatt of electrical energy. Once you go into excessive efficiency computing (HPC), the services want a lot redundancy that you just spend $10 million per megawatt. That is excluding the gear. You have bought a lot larger logistical engineering necessities, and you have got a lot larger capital bills.
Once you wish to supply power for bitcoin mining, you may take variable power, and the actual key half is the price of the power. In Sweden, we will go from 30 megawatts to 3 megawatts in 15 seconds. So we’re in a position to give again power, or take it on.
Once you’re HPC, it’s important to be up on a regular basis, and so it’s good to have this backup of turbines, batteries. Stability of power is way more important for HPC than it’s for bitcoin mining. So you’ve got a matrix that you just’re attempting to play with.
Does the Trump administration’s tariff technique affect your operations?
We hearken to the U.S. as a result of it is so necessary 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 in regards to the overreach of regulatory companies in Washington. They mainly weaponized the auditors to go after anybody that was in crypto. So we mentioned, ‘Let’s simply keep impartial on this jurisdiction.’ Then Trump gained, 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 most of the numerous indexes. We don’t have mining operations within the U.S. but.
However you’ve expanded considerably in Paraguay.
I believe what occurred in Paraguay to Bitfarms is that they went by way of 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, however it occurred, and it’ll drop away, I believe, 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 turn 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’ve the most important progress profile in 2025 of all of the bitcoin miners. We’ve not carried out any of those funky convertible debentures to purchase bitcoin. Most of them paid a lot larger costs. No, we have not carried out 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 gear. This time, it is all for purchasing bitcoin. Bitcoin then goes to a correction, they usually all get strangled. We simply do not wish 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. Properly, 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 wish to keep centered on inexperienced power.
Are there different jurisdictions you’re trying to increase to?
We’re taking a look at proposals coming from East Africa. Ethiopia specifically has plenty of stranded electrical energy. Among the different miners have already gone into that space. They bought 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’ve 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 need to be cognizant that there is a change for lots of the large miners. Main U.S. firms are usually not actually into mining enlargement. 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, it’s good to have progress within the nodes. It is advisable have progress in mining operations so we turn into much more decentralized. Among the firms 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 basically good. The founder was additionally a co-founder of Bitmain. So coming in with a brand new piece of know-how which may be very power environment friendly by way of joules consumed, I believe 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, swiftly 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 outdated royalty mannequin of excessive income per worker, in order that we will cope with these down drafts and never should undergo this panic of huge layoffs.
