HIVE Blockchain Technologies (HIVE) provides February 2023 production update

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HIVE Blockchain Technologies Ltd. (NASDAQ: HIVE) is pleased to announce the production figures from the company’s global Bitcoin operations for the month of February 2023, with 250 Bitcoin produced in February, and a current BTC HODL balance of approximately 2,340 Bitcoin mined using computational power derived from green Energy. The company notes that it reached over 3 Exahash (EH) of Bitcoin mining capacity in February (all amounts in US dollars, unless otherwise stated).

Summary overview:

• HIVE produced 250 Bitcoin in the month of February, from ASIC and GPU mining, representing an average of 91 Bitcoin Per EH, with an average hashrate of 2.75 EH/s for the month of February 2023;
• HIVE reached its 3 EH/s target at the end of February by mining at full capacity of 3080 PH/si at the end of February. HIVE ended the month with 2.81 EH/s mining capacity;
• HIVE has installed over 4,200 BuzzMiners to date. HIVE has received over 5600 Buzzminers in its data centers and continues to install them to increase the overall hash rate;
• HIVE expects to receive an additional 645 BuzzMiners over the next 2 months, representing a total production quantity of 6300 BuzzMiners powered by Intel Blockscale ASIC for the first production run. HIVE is the first company in the world to commercially deploy thousands of its own Bitcoin ASIC miners powered by Intel Blockscale ASIC.

February 2023 Production figures

Frank Holmes, Executive Chairman of HIVE, stated: “We are very pleased to have produced 250 Bitcoin during the month. Our team has focused on profitability, with 25% gross mining margins in our last financial quarter for the 3 months ending 31 December, 2022. We seek to optimize profit from gross mining margins, on a monthly basis, by optimizing the efficiency of our operating fleet, and strategic curtailment or grid balancing.As a result, our average power cost globally was 3.4 cents per KWHR in our last fiscal quarter. We view grid balancing as part of our core revenue and ESG strategy and, where possible, seek to hedge energy prices.”

If you have not seen our latest quarterly results, we recommend that you see “Hive’s results for the third quarter of 2023” Webcast: HIVE Announces Adjusted EBITDA of $1.5 Million.

Aydin Kilic, President and CEO of HIVE, noted: “We have increased our total hash rate by 16% month over month from January 2023 to February 2023. We are continuously looking to optimize the allocation of energy as a resource. This month we did not it. sell energy back to the grid, but rather increased our operating hash rate as this was the most profitable mode of operation. Additionally, our remaining GPU fleet now generates approximately $100/MWHR in revenue, which is greater than $/MWHR compared to Bitcoin ASIC miners in current Bitcoin mining economy, for example a S19j Pro, generates about $93/MWHR with 43.1T difficulty and Bitcoin at $23,000. I am very proud of our team, which has shown expertise in optimizing the use of our GPUs. Even more Impressive is that our GPU-HPC pilot project has generated approximately USD 1,800/MWHR in revenue We continuously optimize the use of our technology resources as a company to optimize profits These progress and a gility allow us to generate positive gross margin during a crypto mining bear market. With a strong balance sheet of over $56 million worth of Bitcoin, HIVE is well positioned in the market today.”

The company’s total Bitcoin production in February 2023 was:

• 250 BTC produced;
• 8.9 BTC produced per day on average;
• 2.81 Exahash of BTC hashrate as of February 28, consisting of 2.58 Exahash of ASIC BTC hashrate and 0.23 Exahash of GPU BTC equivalent hashrate;
• Monthly average of 2.75 Exahash, which is equal to 91 Bitcoin per Exahash, consisting of an average of 2.58 Exahash of ASIC mining capacity and average of 170 PH/s of Bitcoin GPU mining capacity during the month;
• This represents a 16% month-over-month increase in average hashrate (January was 2.38 EH/s average hashrate).

Bitcoin HODL Update

As of today’s press release, HIVE has approximately 2,365 Bitcoin, with a market capitalization of over $56 million.

HIVE sold a total of 267.7 BTC for a total net proceeds of $6.6 million in February 2023.

The difficulty of mining the Bitcoin Global Network is volatile

Network difficulty factors are a significant variable in the company’s gross profit margins. The Bitcoin network difficulty was 39.4 T per 1 February, and increased to 43.1 T per 28 February, reaching a record high. Consequently, Bitcoin mining difficulty ended the month about 9% higher than the beginning of the month.

Bitcoin Network Difficulty is a publicly available statistic that reflects the total number of Bitcoin miners online and is important for analyzing a company’s gross profit margins and the number of Bitcoins produced. This data is available on many websites, here is one quote: https://www.blockchain.com/explorer/charts/difficulty.

As more people mine Bitcoin (difficulty increases), the daily Bitcoin block reward currently set at 900 Bitcoin per day is split between more miners; thus each miner receives a smaller portion of the block reward. Conversely, when Bitcoin prices fall, many miners may lose money and shut down, thus removing their hashrate from the network, leading to a reduction in network difficulty.

Those miners with the lowest production costs; by virtue of having more efficient machinery and/or lower energy costs, are able to continue their production during these volatile cycles. Not all miners will mine continuously during the month, as a result some miners will produce less Bitcoin than expected, relative to their advertised hashrate. For the foregoing reasons, HIVE will self-limit parts of its operations if the unsecured spot energy prices are uneconomical, thereby leaving parts of its total gross hash rate unused.

All Bitcoin miners strive to use the most efficient Bitcoin ASIC chips and we are pleased that we have been able to upgrade our global fleet during this downturn in the crypto market.