HIVE Digital Technologies (TSX-V:HIVE, NASDAQ:HIVE), a cryptocurrency mining firm, has taken steps to be in a strong position ahead of the upcoming Bitcoin halving event set to take place in late April.
To create scarcity and prevent inflation, Bitcoin has a maximum supply of 21 million. Every four years the mining reward is halved to continuously reduce the rate at which the coin is introduced. At the upcoming halving, the block reward will decrease from 6.25 to 3.125 Bitcoin.
CEO Aydin Kilic told Proactive that going into the halving event, HIVE has worked to increase its mining capacity and reduce its average operating production costs per Bitcoin while increasing its holdings.
In late February, the company announced it had purchased another 1,000 Bitmain S21 Antminers to boost its Bitcoin mining capacity, which Kilic said would drive greater efficiency, in turn resulting in reduced energy consumption and a reduced cost per Bitcoin.
It mined 200 Bitcoin in February to increase its holdings by 10% month-over-month to 2,131 Bitcoin.
“This is very important going into the halving because we’re going to have 900 Bitcoin a day rewarded by the network dropped down to 450 Bitcoin a day rewarded by the network,” Kilic said.
“It will create some short-term pain for some of the miners, but we’ve got an incredibly strong balance sheet going into this halving event and it’s a great opportunity to be strategic because you can buy distressed assets.”
Meanwhile, HIVE has been scaling its high-margin performance computing business, targeting a $20 million annual run rate revenue by the end of March, up from $5 million in December. The company’s goal is to achieve $100 million in annual run rate revenue in 2025.
“It’s very exciting going into the halving having a high-margin, stable income business because Bitcoin mining is volatile,” Kilic said. “Having a two-pronged approach gives us an edge against our competition.”
He highlighted that HIVE was an early mover miner to expand into high-performance computing, using graphics processing units (GPUs) from its Ethereum mining business.
“Now, some of our Bitcoin mining peers have ordered GPUs and said they are going to get into high-performance computing but they have zero pedigree and zero experience doing it,” he said.
Bitcoin bull run expected post-halving
Kilic is bullish on Bitcoin post-having and believes the coin could reach $100,000. Bitcoin reached a record high above $72,000 on Monday.
“Usually, in the six to nine months following the halving event, there’s a massive Bitcoin bull run,” he told Proactive. “So even though we hit an all-time high this month, you’ll see a real bull rally where it will eclipse the all-time high massively. We will be looking at well over $100,000 per Bitcoin.”
He highlighted that scarcity economics should benefit HIVE following the halving.
“We’re the best pick in the game right now because we are trading at such an attractive price relative to our production,” Kilic said.