HIVE Digital to Build 100MW Bitcoin Mining Facility in Paraguay

HIVE Digital Technologies has unveiled plans to construct a 100-megawatt Bitcoin mining facility in Paraguay. This project marks the company's first venture into the country.

Doubling Mining Capacity

The new facility is expected to significantly boost HIVE’s mining capacity. Upon completion, it will increase the company's mining hashrate from 5.6 exahashes per second to 12.1 EH/s.

Engagement with Paraguayan Officials

HIVE's announcement follows a visit by company executives to Paraguay, where they met with President Santiago Peña and other senior government officials.

The executives identified substantial growth potential in the region. The energy for the new facility will come from Paraguay’s Itaipu hydroelectric dam, which not only meets the country’s entire electricity demand but also has ample surplus power, making it an ideal choice for Bitcoin mining operations.

Electricity Cost Concerns

However, the announcement coincides with a decision by Paraguay’s state-run electricity grid operator, Administración Nacional de Electricidad (ANDE), to raise electricity costs for legal cryptocurrency miners starting August 1. This has raised concerns among miners, who argue the hike could cost the country’s economy up to $1.5 billion.

Financial Contributions and Equipment Acquisition

Despite this, HIVE’s planned facility is projected to contribute over $100 million to ANDE over the next three years. Additionally, HIVE has acquired 500 Bitmain S21 Pro Antminers, set for delivery this month.

Global Operations

This expansion will make Paraguay the fourth country where HIVE operates, joining Canada, Iceland, and Sweden. The company currently holds 2,521 Bitcoins, valued at over $170 million.

HIVE’s share price rose

Following the announcement, HIVE’s share price rose 8.4% to $4.50 on the Nasdaq, indicating a positive market reception. Despite a challenging start to 2024, the company’s stock has increased by 2.5% this year.

Paraguay’s mining industry is in a difficult phase

The announcement comes at a time when Bitcoin miners are experiencing a critical phase known as “capitulation.” This occurs as miners reduce operations or sell off mined Bitcoin to sustain their activities amidst declining profits.

Miners have faced significant underpayment during this period, with daily revenues falling by 63% since the halving event. Total daily revenues have plummeted from $79 million on March 6 to $29 million currently. Revenue from transaction fees now accounts for only 3.2% of the total daily revenues, marking the lowest share since April 8.

Bitcoin's hashrate, a measure of the total computational power securing the network, has dropped by 7.7%, hitting a four-month low of 576 EH/s. This decline is reminiscent of the post-FTX collapse conditions in December 2022, suggesting a potential market bottom.

Illegal mining is huge in Paraguay

Paraguay has reached a significant milestone in its crackdown on illegal cryptocurrency mining, equaling Venezuela in the number of seized Bitcoin (BTC) mining rigs.

Hernandarias district has seen a surge in illegal mining activities, with 20 criminal cases filed this year.

To this end, Paraguay’s National Electricity Authority (ANDE) conducted more than 70 surprise inspections, resulting in the seizure of over 10,000 ASIC mining rigs.

The latest raid in Ciudad del Este led to the confiscation of 450 ASIC rigs stored in a warehouse.

Related Reading：Illegal mining surges, Paraguay cracks down on illegal cryptocurrency mining