Frank Holmes has a long career as a money manager. Funding from gold mining companies. Participate in the creation of a Gold Royalty Company. Development of financial products for the aviation industry – all of these together with US Global Investors (GROW), the public asset management company he has been leading since 1989.
He is also chairman of Hive Digital Technologies (Hive), a Bitcoin mining company with a market capitalization of $345 million and a rapidly expanding footprint in Paraguay. He said the company was born after he tried to launch the Spot Bitcoin Exchange Trading Fund (ETF) in 2017.
Hive was green from Get-go. That first facility used geothermal energy in Iceland. Sweden used hydroelectric power plants just 100 kilometers south of the Arctic Circle. Currently, the company expects to have approximately 430 megawatts (MW) of infrastructure up and running by the third quarter of 2025.
Holmes will speak at the Consensus 2025 BTC & Mining Summit held in Toronto from May 14-15.
Towards the event, Holmes shared his thoughts on the Hive’s position in the broader mining industry, the company’s decision to recycle GPUs for AI purposes, and what the future holds.
This interview is condensed and edited for clarity.
Coindesk: Hive reuses some of its AI GPUs. Can you tell me about that?
Frank Holmes: It once had 130,000 AMD chips, mining ether (ETH). We were around 6% of the world’s ether mining and were extremely beneficial. When that was gone (in the transition to Ethereum being proven in 2022), there was this expertise in GPU chips, replacing many of the AMD chips with NVIDIA chips. This allowed me to start descending my AI pass.
The difference between a basic ASIC miner and an Nvidia chip is like driving a Bronco and a Ferrari. The delicateness of all the gears that enter the motor, engine, and high-performance vehicle is all related to the GPU. Once the Antminers S21 Pro appears, it takes 6 hours to unleash them and plug them in. When the Nvidia chip appears like the H100, it’s been six weeks since it’s building and working the brain. So it’s a completely different skill set.
When building infrastructure for Bitcoin mining, you spend $1 million per megawatt of electricity. Once in high performance computing (HPC), the facility requires a huge amount of redundancy, spending $10 million per megawatt. It excludes equipment. Logistic engineering requirements are much higher and capital costs are much higher.
If you want to source Bitcoin mining energy, you can take a variety of energy. The real important part is the cost of energy. In Sweden, you can move from 30 megawatts to 3 megawatts in 15 seconds. So we can return the energy and take on it.
If you are HPC, you need this backup of the generator, battery, because you always need to up. Energy stability is far more important to HPC than Bitcoin mining. So there’s a matrix you’re trying to play.
Will the Trump administration’s tariff strategy affect your operations?
Because it’s extremely important for branding and fluidity. But we didn’t do anything in the US because we’re always worried about the overreach of Washington regulators. They basically weaponized the auditors to chase after those who were in the code. So we said, “Let’s stay neutral in this jurisdiction.” Then Trump won, so we decided to move out of headquarters. If your headquarters is in the US, it is strategic because you get many qualifications in different indexes. There is no mining work in the United States yet.
But you’ve expanded significantly in Paraguay.
I think what happened to BitFarms on Paraguay was a distraction with the CEO (left). There was a vacuum. After that, the riots (riots) tried to come to buy them and control them. During that period of chaos, the Paraguayan government put tariffs on Bitcoin miners, which was very strange, but that happens and I think it will fall next year. It was all unsettling for the new CEO and he wanted to pivot to the US, so they merged with the base (SDIG) to become an American company, essentially a reverse acquisition.
They still have 80 megawatts of power in Paraguay, but there are most of the operations we are taking over now. We are finishing the construction and we are very excited. Some machines are already running. In 2025, there will be the biggest growth profile of all Bitcoin miners. I have not done any of these funky convertibles ventures to buy Bitcoin. Most of them paid much higher prices. No, we’re not doing it because we know how volatile it is. Every time everyone starts buying this rampage debt – well, in 2021, it was all about buying mining equipment. This time, it’s all about buying Bitcoin. After that, Bitcoin is corrected and everything is strangled. We don’t want to be in that position.
There are really opportunities in Paraguay. It is the largest dam in the Western Hemisphere, sharing 50/50 with Brazil. It is 14 gigawatts and is 8 km long. That’s very immeasurable. If Paraguay does not use electricity, Brazil can maintain it. Well, Bitcoin Miners don’t do that. We help them build their infrastructure and they get paid US dollars each month. So it is an advantage for both sides for the Paraguayan government and an advantage for both sides for Hive shareholders as they want to focus on green energy.
Are there other jurisdictions you are trying to expand?
We are looking at proposals from East Africa. Ethiopia in particular has many chains. Some of the other miners have already entered the area. They got all this cheap money from the World Bank and other institutions and built dams, but then they didn’t build power lines throughout the economy. That’s a huge cost. There is a very clear vision of moving from 6 EH/s to about 25 EH/s in the next nine months.
How do you see the situation in mining now?
I don’t think I’m healthy. You have to realize that there is a change in many big miners. Major US companies are not actually interested in expanding their mining industry. They are primarily focused on adding bitcoin to their balance sheet. They are all emulating Michael Saylor’s business model. However, for the Bitcoin ecosystem to function, it must grow into a node. We are further decentralized as mining operations need to grow. Some companies probably need to invest more in Lightning networks or ordinal infrastructure to distinguish themselves.
What Bitdeer (BTDR) is doing (in ASIC manufacturing) is really smart. The founder was also the co-founder of Bitmain. So, although it has new technology that is very energy efficient in terms of Joules consumed, I think it is very competitive for the capital market.
Bitcoin miners intend to go through a process that took place with gold miners. When GLD came out for bullion, there was a sudden separation – gold stocks and GLD. In this century, gold bullion has far surpassed the S&P 500. However, only quality gold stocks are actually superior. One thing Hive has always had is the old loyalty model of high revenue per employee. So you can deal with these downdrafts and don’t have to go through this big layoff panic.
