HIVE Retiring Old Bitcoin Miners as Hashcost Hovers $50/PH/s Ahead of Halving

Canada-based bitcoin mining firm HIVE Digital has doubled down on purchasing additional Bitmain’s S21 Antminers for immediate delivery to upgrade its fleet in preparation for the halving.

The company said on Thursday that it has purchased another 1,000 units of Bitmain’s S21 series totaling 200 PH/s with an efficiency of 17.5 J/TH. The transaction adds to the preorder of 7,000 S21s announced in December for $24.5 million, which will be fully delivered by June.

In November, HIVE also made two consecutive purchases of Bitmain’s S19K Pro equipment, totaling 9,800 units with about 1.18 EH/s in hashrate.

All told, the firm has ordered 2.78 EH/s of the latest generation of equipment since November which could improve its overall fleet efficiency to below 25 J/TH.

As of Oct. 31, HIVE had an installed hashrate of about 4.15 EH/s and anticipates reaching 5.5 EH/s with the new purchases by June. That suggests HIVE will retire about 1.4 EH/s of older miners currently in operation and replace them with the newer generation of equipment.

“Rather than expanding our footprint at this time, we are upgrading our fleet with the most efficient machines available, which in turn will lower our average costs to produce a Bitcoin,” the firm said in the announcement.

Based on HIVE’s earnings report for Q4’23, its cost of bitcoin production remained steadily at $22.8k per bitcoin mined even though bitcoin’s average hashrate increased by 22% from 390 EH/s in Q3 to 475 EH/s in Q4.

That was made possible because of the bitcoin transaction fee surge in December and also because HIVE managed to reduce its hashcost from $54/PH/s in Q3 to just over $51/PH/s in Q4. This means the company is estimated to have incurred a daily gross cost of $51.2 for each PH/s of its hashrate in Q4. That may explain HIVE’s need to accelerate upgrading its fleet before the halving.

Bitcoin’s hashprice, the dollar value of daily revenue that each PH/s of hashing power can generate, is currently north of $80/PH/s. If there is no substantial breakout of bitcoin’s market price, bitcoin’s hashprice could be cut to less than $45/PH/s after April.