Hive Blockchain Switches To Renewable BTC Mining After The Ethereum Merger
Hive Blockchain, has switched to bitcoin mining. Following the Merge, mining companies that mainly depended on Ethereum saw a reduction in revenue.
After losing its main source of revenue, the once-dominant Ethereum mining company Hive Blockchain is expanding. After the Ethereum Merge, which took place in the middle of September, it was unable to mine the cryptocurrency.
The network has benefited from the switch to proof-of-stake in terms of ESG (Environmental, Social, and Governance) compliance. Additionally, it has benefited holders of ETH who are eligible for staking returns. However, businesses that heavily relied on Ethereum mining have been severely impacted.
One of those businesses is Hive Blockchain, yet it has a solid balance sheet. Hive’s third-quarter report has been examined by BTC mining expert Jaran Mellerud, who has revealed why Hive is most likely to survive.
Hive lost 40% of its revenue as a result of the Merge
Its “dead ETH mining company was significantly more profitable than its remaining BTC mining operation,” the speaker continued. He continued by estimating the actual loss to the business’ operating cash flows at about 60%.
The bad news was that. The good news for Hive is that its Ethereum mining operations are being converted to BTC mining. By February 2023, the company wants to increase its Bitcoin mining capacity from 2.8 EH/s (exahashes per second) to 3.3 EH/s.
Additionally, Hive has a liquid balance sheet that is mainly made up of Bitcoin holdings. The company only has $8 million in cash on hand, but 3,311 BTC, or 88% of its liquidity, are in its possession.
Hive also has one of the lowest debt-to-equity ratios among the publicly traded miners, according to Mellerud. It isn’t burdened by the hefty debt service payments that are now holding back its rivals because it only has $26 million in interest-bearing debt.
Benefits of renewable energy
The first crypto-mining business to go public in 2017 was Hive. Additionally, its operations are entirely geothermal and hydro powered and are situated in Canada, Sweden, and Iceland. This indicates that it hasn’t experienced the kind of significant energy price increases that have impacted other miners.
Additionally, traditionally, the company has been able to extract 5% to 30% more BTC than other rivals. The analyst suggested that “this may be because the company is achieving a higher up-time due to a reliable hydropower supply.”
The current state of bitcoin mining is unfavorable due to high hash rates, low asset prices, and high energy costs. By Nov. 28, hash rates had dropped 14% from their 273 EH/s apex, but since then, they have climbed back up to 251 EH/s.
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