During a recent TheStreet Roundtable interview, Frank Holmes, the executive chairman of Hive Digital Technologies, laid out a view that separates short term market turbulence from long term infrastructure growth, arguing that leverage driven sell offs do little to alter the underlying thesis for Bitcoin and data centers.
Holmes acknowledged that price weakness is possible and pointed to excessive leverage as a recurring risk.
“I think it could sell off a little pressure whatever is happening in the markets and trigger some shorts. It was not real cash buying. It was a lot of leverage buying. And anytime you get a lot of leverage buying and someone gets forced out you create a contagion and knock it down short term.”
Related: Legendary hedge fund analyst warns Bitcoin is heading towards 1929-style crash
Several large Bitcoin Miners have announced high-performance computing (HPC) centers or are completely shifting their businesses towards it, including Bitfarms, MARA, Hut 8, and others. To those who see the volatility of Bitcoin as too high-risk, HPC is a safer alternative that generates more revenue in many cases.
Despite Bitcoin’s risk, Hive continues to scale production. Even as mining difficulty rises, Hive has expanded output.
“We have strapped on from three Bitcoin a day to ten Bitcoin a day and we are going to grow that again,” Holmes said. “We have been able to more than triple our daily Bitcoin production.”
Holmes believes the two are complimentary.
“Our philosophy is to run parallel. Not one is better than the other. They are both needed. And to build HPC, the fastest way to get your money back is to build a Bitcoin data center.”
Hive sees long term potential in building out power and data centers in Paraguay. He described them as “the only country in Latin America that is really pro-America.” He also praised their president for his forward thinking policy in regards to Bitcoin Miners.
Additionally, the nation has long been selling excess electricity to neighbors who have not always paid. Argentina currently owes over $200 million in electricity debt. Having regular income for this excess energy is a huge win for Paraguay.
“Bitcoin miners save the day,” Holmes said. “(The utility providers) get paid every month. Not only do we build substations all across the country, we pay them every month.”
