HIVE Digital Technologies Ltd. (HIVE) Earnings Call Transcript & Summary

Good afternoon, everyone, and welcome to today's webcast for HIVE Blockchain Technologies. My name is Holly Schoenfeldt. We are happy to have you here today to provide a corporate update from several members of the HIVE team. As you can see on Slide #2, I will briefly mention disclosures, which you are welcome to read in full once the presentation is over. Except for the statements of historical fact, this presentation contains forward-looking information within the meaning of the applicable Canadian Securities Legislation. This is based on expectations, estimates and assumptions as of the date of this presentation. Now let's move on to Slide #3. I am pleased to welcome today's presenter, Frank Holmes, Executive Chairman; Darcy Daubaras, Chief Financial Officer; Aydin Kilic, President and COO; and Adam Sharp, Financial Writer and Editor of the HIVE Newsletter. Now let's move on to the next slide, where Frank Holmes will take it over for a macro overview.

Well, before we jump into that, I'd like to go back to Darcy and give a recap, Darcy, of the meeting we just had for all the shareholders that were not able to attend.

Yes, absolutely. We'll be putting out a formal notice later today, but we're very pleased to announce that all the resolutions that were considered at our 2021 Annual Meeting of Shareholders that were held about 2 hours ago were approved and overwhelmingly by the shareholders. And that's exciting from the company's point of view, all the Directors nominees were duly elected. We've reappointed Davidson & Company LLP as our independent external auditor for the ensuing year, and our option plan and restricted share unit plans were reapproved also. So we thank all of those shareholders that returned their votes because we very much appreciate it, and it makes you part of the process. Thank you.

Thank you, Darcy. The next visual is standard deviations. And I think it's so important for investors to recognize that everyone has a different fingerprint, and just like everyone has different DNA and every asset class is its own DNA volatility. And because we mine Ethereum and Bitcoin and hold it both, in fact, in the past year, Ethereum's outperformed Bitcoin but has more volatility, it shows up in our stock price. And as you can see, Tesla used to be a very high daily volatility, but since it became part of the S&P 500, it's gone down from a daily volatility of 7% to 3%, which is still 3x of the S&P 500 is. So with that, the next visual, I'm just proud to share with all those shareholders who stayed with us that we're the first to go public in the crypto mining space for the first to mine Bitcoin and Ethereum and we're first to buy data centers and first to have 100% green with ESG strategy. And first to be interlisted in North America and in Europe. And now this year, in particular, on the next visual, there was a milestone to get listed on NASDAQ in July. We listened to our shareholders. We pursued it and it's been done. So now we're thrilled about it. Liquidity, we can see, has picked up greatly. It's much more significant in the U.S. than it is in Canada. In the past year, we did raise through an ATM, $100 million. This took place in February. And what's interesting for us is that it allowed the company to upgrade and expand its operations while holding and paying all of its electrical bills and salaries. Now the salary payroll and benefits, et cetera, you can -- if you do a comparison of all the crypto mining companies, we're at the very low end of that, whereas the other mining companies have a much bigger cost structure to the number of employees they have to compensation, what they give. So it's not that they're underpaid at HIVE, it is the fact that we want to have as -- a lean fighting machine like Navy SEALs, that go in to execute and when we have great partnerships, very important strategic relationships with Barrage, in particular, Croatia that have been very instrumental for us to be very cost effective and be able to execute. Now some of the other big milestones in the past year was not only this extra has to be able to buy equipment on a dime. The ability to raise cash at the ATM did facilitate us when all of a sudden, in the summer, we were able to buy 3, what I'm trying to think 300 -- about 300 petahash of 3,000 MicroBT machines from foundry at an extremely attractive price, but we had to come up with money right away. And the ATM was able to facilitate that we quickly fast-tracked, and we achieved 1 exahash by August. This is a facility to show you a picture. Now this picture here is showing you mining Ethereum. But the exahash was by the expansion of our operations in New Brunswick and Lachute in Quebec. Now I'm going to go back in time, and I want to just remind investors that it is just a history of Blockchain technology. What we're really seeing Blockchain technology is what they like to call triple entry accounting. And there's been no significant breakthrough and accounting system with double-entry accounting and that had a slow but profound effect that the Venetians adopted it, and it allows the banking industry to grow. Prior to that, it was a haves and have nots, royalty and service and along came with a growth of a middle class, but you needed to financier. Interesting enough today, all the sources really like to go after the banks and don't like the banks, but you don't have a middle class unless you have a good banking. And even to this day in emerging countries, which U.S. Global has lots of experience in, the stronger the banking system, the greater the middle class. So where we now we've evolved the digital world, and it's to me, was most fascinating on the history is that the first e-mail was in 1971. The Internet was introduced to the public at '91 when you could think of that's when the wall is coming down in Berlin, sort of the same time period. And in '91 Blockchain was created. But why did it stay dormant for so long? And who created it? What was telecom companies that created because those telecom companies that move the money for banks. And so they wanted to have some way to move money, not knowing which bank it was from A to B. The public could not read, but you have many validators and you could be protected with an encryption. So this sort of concept of triple entry accounting was created, and Google comes along in '97 and '98. Nick Sasbo created the first smart contract, it was called Bitgold, and that was way ahead of its time. And then Facebook gets launched in 2004. Then we have the crisis, the '98, '99 crisis and Bitcoin basically is created. And it validates the significance of the store value and the ability to move something of value around the world in this new digital world. Now the 2021 was El Salvador makes Bitcoin legal tender. So things are evolving, but it's not just the adoption process, it's gone global. Bitcoin is everywhere in the world. And that's what people have to recognize. It's not just an American phenomena. It's a global phenomena. The adoption is here, as you can see on the next page about Ethereum, the second biggest coin and Ethereum's growing ecosystem. Now these are lots of colors, and you can take a look at the names, and I'm sure you may recognize several of the names, but there are many names that you won't recognize. On the next visual, you can see Bitcoin's growing ecosystem. And there's many more names here, which you could say, "Yes, I know that." In particular, for me, a pivot point with Fidelity -- the CEO of Fidelity and at the consensus conference in New York City in May of 2017, Abigail Johnson, who was known as Abby, never speaks at conferences was speaking at a crypto event and how they believe the back office transactions, everything is going to go on the Blockchain and they invested a big part of it. And it's interesting to see how it's evolved at more and more names like Charles Swab refused to deal with it now, because the excessive Robinhood has to jump in on the game. We do know that JPMorgan did nothing but trash the industry until they came out with their own stable points. We are thrilled about that because it needs to use Ethereum. So I'm very positive about seeing this adoption. But what was significant in my world of looking at it was PayPal. You can't buy our mutual funds or ETFs or HIVE stock on PayPal, but you can buy Bitcoin and you can buy a fraction of it. And a lot of kids have got their checks from the government, their $1,200 checks, made 10x something 5 to 10x their money. So here, you're able to go and buy a fraction and as Bitcoin went up, you could take -- peel some of it off, take some profits and buy a new TV or take a holiday to Miami for the big crypto conference. The other big part of this adoption that grew, and you can see where they called Metcalfe's lot of got Robinhood. Robinhood makes it so easy to buy and sell crypto stocks and easy to buy HIVE stock. And if you visit their page and they make it so simple to be able to trade around it. And I think these are very significant components of the growth in the crypto mining stocks, in the liquidity and in particular, these other coins outside of Bitcoin, Ethereum which we're focused on mining, the Doge coins and things of this nature, just capture the imagination of speculators especially young millennials and Generation X and Y. The -- there's an ongoing information almost overload about this hot coin and that hot coin. And it's all been validated the crypto space by Bitcoin. Next is not all miners are created equal. A Cryptominer's profitability is based on energy prices, hardware prices, crypto prices, hashing difficulty and lease expenses. So one of the things we've had to deal with is to go for green energy and work on where we can get stable, low cost of energy, hardware prices, make sure that we're keeping all those suppliers competitive in their pricing. And crypto prices, we don't control. Hashing difficulty, we don't control. Lease expenses is something that we try to control with landlords as the best we can. But we do know that only our own facility is always the best and that's what we've seen so far. And that has been very accretive to the shareholders. That's a great asset on balance sheets. Since we started off with that transaction, negotiating and tied up with shares and cash that completed, it was CAD 350,000, HIVE then took off and the valuation were finally closed because crypto prices and HIVE stock appreciated so much. So it was on stock were $25 million. But when we did that transaction with it so appealing, it was only $350,000. And right after we did our transaction, came out and purchased for $2 million a megawatt. So I'm really thrilled about how we've created and built out and expanded the operations for about $600,000 a megawatt, and that's really creating great value for the shareholders, long-term data center value. Now short term, which drives the crypto mining stocks. They're just, for me, like a gold stock. The daily gold price or the daily coin price is what drives the sentiment and the trend is above a moving average or below. And we can see at HIVE now trades with Quant funds by the minute. Crypto all of a sudden starts rising, HIVE starts going up. Crypto prices start falling, all of a sudden, HIVE, was up 7%, now it's down 3%. What drives that is the volatility of the underlying crypto price. Now the other part of the valuation is your current hashing power and then the future potential hashing power. Firstly, I think the market has put a great value on the future potential hashing power. But if you don't get the machines at time or you don't build out your electrical needs on time, you won't be able to execute. So HIVE, we've been very delicate and trying to make sure we're stepping -- taking a 2-step; one is for energy, green energy, low cost; and the other one is making sure that we have the ability to go buy equipment and upgrade. So last year, this $100 million ATM is a very significant. Not only do we able to HODL, but the inventory of coins that we have, even after this correction in the past couple of weeks, is at close to $175 million. So this was nothing when Darcy and I basically came to -- the executive CEO, the interim, and the Executive Chairman and Darcy is a CFO, we had $5 million of cryptocurrencies in liquidity and now it's up to $175 million. We have many more employees, but nothing compared to many of our peers, which have a number of size, many more than us, and this allows shareholders to enjoy our run rate is close to $15 million of revenue per employee. So the latest updates, Aydin and Darcy will give you some more granularity. But November 9, we announced $110 million financing. By November 30, the closing of a $150 million deal. This allowed us to put more cash on our balance sheet to tie up more equipment for delivery and opportunities to expand going into the next 12 months. But you can also see that on November 16, we deliver. And I'm so proud of the team and what they've been able to do. HIVE announced record-breaking revenue of $52.6 million and earnings in the second quarter and our holding position allow us to have spectacular returns for the shareholders. As you know, earnings come from 2 components: one is from operating, the other is from your investments. Investments is from holding for us. And also, we have investments in, which I'll talk about in a second, but some of these other investments can become very meaningful in the quarter. And then HIVE presents on October 21, a production of 1,350 Bitcoins. And now we're getting into a regular habit of giving you the numbers every month. And as you can see, that November 2021, this year, its numbers, it was 218 Bitcoins produced. USD 13.2 million in Bitcoin mining revenue, 1.3 exahash of bitcoin mining capacity. And that -- and then mining of Ethereum, it was 2.334, that's about $10 million of Ethereum revenue and a TeraHash of 4.36 of Ethereum mining capacity generated $23.6 million. Now, that to me is a very, very exciting numbers. And Aydin will give you some more information on that. And you're going to go into more detail in a few minutes on Boden as expansion of 10 megawatts. New Brunswick's 20 megawatts, showing you lots of pictures. But I'm also very proud of HIVE getting involved of the Bitcoin Mining Council with Michael Saylor. And what we did, we found in some of these other countries like Sweden and in Quebec. There was basically here and uncertainty being spread around, along with doping statements by governments. And so we said, let's make it 3 minutes. We -- the team basically distilled it down from 30 minutes to 3 minutes. We put this on YouTube, and we have it translated to Swedish, Spanish, French and English. So it is used for educational purposes to inform the world that Bitcoin mining is very tiny. It's very tiny compared to what was alleged out there. So I highly recommend if you've not watched the video, for those with attention of span of millennial, it's only 3 minutes, so you should be able to watch it. And even for old guys like me, and I think my attention span is shrinking as I keep running in this industry. Another person I highly recommend is [Indiscernible]. HIVE beats competitors in gross margins, and this is an older visual last February, and it's regularly updated. But we do have, I think, some of the highest gross margins with locking in energy costs last year was $0.02. Going into next year, we're going to be with $0.03 in Sweden and our overall energy costs. I think in New Brunswick, this is forecast to be around CAD 0.04. And in Quebec, it's like $0.05, $0.055. So from that end, we're very, very competitive low-cost energy, green energy is most important, which allows us to have high gross margins. And one of the things we've always talked about was regarding proof of stake, proof of work and that we upgraded with a huge purchase from -- in the past year from NVIDIA, an equipment that allows us to get our money back by mining Ethereum and then it also allows us to go into the future and take a look at HBC and gaming. But we have an opinion that proof of stake is not going to occur like you think is going to occur because this thing keeps getting kicked down the road. I've been listening to this crybaby story for 5 years. And this fear-mongering is so great. All I've seen now these upgrades and people's staking is strength to supply of Ethereum in the ecosystem. What Metcalfe's law says in a high Blockchain, you can watch the 3-minute video explaining what Metcalfe's law tells you, it basically says Ethereum is going to have a bigger performance and it has a outperformed big point. So with that, I really think that this whole idea that if you just move everything from proof of work to proof of stake, really, what's happening there is that you centralize it, you're going from a decentralized mechanism and Ethereum is the most decentralized. It showed, when China kicked everyone out of -- for Bitcoin mining out of China, the network fell for Bitcoin, Ethereum just kept going. It means more and more people. So it might travels around the world and local tier is designers, architects, when they're going to bed and gamers, they turn on the machines that are mining Ethereum. And it's not a difficulty with software, you have good GPU chips. So you have this huge universe. That means if they want to sell that Ethereum to buy and upgrade their equipment, They need a wallet, they need an exchange, they need an account. So we're talking about hundreds of thousands of gamers and designers all over the world using GPU chips that have been moonlighting, mining Ethereum and all of a sudden exploring and buying more and trading. So I think that just going to 100% proof of stake is highly dangerous and it's not going to happen because it creates centralization and the whole concept of Bitcoin is to be decentralized and the same thing with Ethereum. And so with that, Adam Sharp is going to go to more detail of how that's going to take place in the research, and I hope you stick around because it's very informative and useful. But HIVE's strategic partnerships in the past year as a DeFi technology, they usually -- basically the backbone of Ethereum as a backbone for new DeFi and DeFi has enhanced shareholder value. It's been a great win that they have an ETF in Sweden that's close to $0.5 billion in assets. And we were a seed shareholder of tokens, which is now very profitable. We -- most recent was Network Media, which is basically going in the NFT business, it's already has a very attractive model -- film content-making model. And then Titan is a leading Blockchain software company. And so I think these have all been important long-term investments in the ecosystem supporting. We do not want to hire all these employees. We just want to have relationships with the smartest and most ambitious people with good ethics -- good work ethic with values, and that's why we've made these strategic investments. Now I want to turn it over to crypto market update with Adam Sharp who has a wonderful newsletter he started years ago. I've always enjoyed his sort of early coverage on crypto and Bitcoin, Ethereum and some of the other coins, in this whole argument, proof of work versus group of stake. And I'm on the opinion that the proof of stake is just a big bad boogie man which is good for us because the competition is not mining Ethereum. So turning it over to you, Adam.

Thanks a lot, Frank. Yes. So as Frank mentioned, there's currently a huge discussion going on about Ethereum 2 and when and if this merge actually happens. So we're going to dig into that a bit. Most of you guys probably already know this, but proof of work is the current consensus mechanism that Ethereum and Bitcoin both use. Miners compete and try to solve complex mathematical problems. It's kind of the gold standard in the crypto world, it's considered very secure. It's expensive to attack, that's one of the reasons it's secure. And as you all also probably know, Ethereum eventually plans to switch to proof of stake. So this would replace miners with validators who earn rewards for staking their Ethereum basically agreeing to lock it up for a while. But talk about this merge has really happening for at least 4 years now, really since the beginning of Ethereum. Next slide, please. So these are just a few of the delays that have happened on the road to maybe E 2.0. And I mean, as you can see, they created this thing called difficulty bomb, that's basically like a deadline that we have to do the merge before that. And they just keep pushing it off and they keep pushing it off. So gosh, it's understandable, really, the difficulties that they're experiencing because changing the world's largest and unprecedented kind of decentralized smart contract platform into a totally different consensus mechanism is a very, very tricky task really. And they just keep running into new kind of unexpected things. So basically, we're just -- I mean, we're like everyone else. We don't have any special knowledge about what's going to happen, but based on what's happened in the past, we think that there's still a lot of time left to mine Ethereum. And like Frank said, other miners have really hesitated to invest because of this, and it's been great for HIVE because mining Ethereum is extremely profitable right now. It has been for a long time. So we just -- we think that there's still quite a bit of Ethereum mining to do. And in the meantime, we're focused on really scaling up Bitcoin mining operations, as Frank and Darcy spoke to. Next slide, please. So now I'm just going to kind of go over why we are bullish on Eth and Bitcoin. There have been a lot of Alt coins and stuff that outperformed over the past year. A lot of them have crashed over the past month or so. But it's become a big discussion in the world. Why buy bit -- Eth and Bitcoin when you can get in early on these other projects. But -- so we're going to dig into why we like Eth and Bitcoin and then discuss some of those other projects as well. So these are, by far, like Frank said, the most decentralized blue chip projects in crypto, probably the most decentralized in general. They have the broadest ownership. And we think that decentralization is going to prove important in the long run. There's arguably a lot less regulatory risk, right? There's no centralized company that you can sue. You can't sue Bitcoin and you can't sue Ethereum. But some of these other newer projects have centralized entities that control a lot of their technology and their coins. So we think that decentralization is going to be pretty important in long term. The open source software that is being built around Eth and Bitcoin is really, really exciting. I wrote about this in the last newsletter, and we're just seeing an incredible pace of innovation on both chains, really, just -- like Uniswap is an example that I used. And Uniswap is a decentralized exchange. We're going to talk about those a little bit later. But -- it's actually doing more volume than coin-based now. And this is a decentralized exchange that runs on top of Ethereum and uses smart contracts instead of people pushing buttons in a bank. It's a very powerful kind of platform. And because it's all open source, anyone can take this code and make their own version of anything. So it just creates a very powerful innovation cycle. The other thing that we like is that both of these current -- both of these cryptos are evolving into sound money, basically. So with the last halving, the Bitcoin minor reward inflation rate is now just 1.75% per year, and it will be half that in 3 years. Eth recently has been deflationary. In other words, its total supply has actually contracted since EIT1559, which introduced a new burn mechanism that lowers supply with every transaction. The other big thing that's happening right now is that both are scaling successfully with Layer 2 technology, and we're going to get into Layer 2 technology in more detail, but -- so lightning -- the Bitcoin network has the lightning network, which is a layer 2 that allows transactions to be sent kind of in a peer-to-peer fashion Bitcoin transactions, but they're not conducted on the actual Bitcoin Blockchain. So it doesn't clog up the Blockchain and you can settle up in larger batches on the main Blockchain at a later time. So Ethereum is doing something similar -- well, kind of similar. They are using primarily 2 different technologies, one is called ZK-Rollups and the other is called optimism or Optimistic Rollups. And there are just tons and tons of Layer 2s now building on Eth. And these have the potential to really bring these blockchains to mainstream levels of scalability, right? Eventually, we could be talking Visa levels of scalability. So it's really encouraging to see all that's happening in the Layer 2 world. So Bitcoin. Boy, Bitcoin has -- it's had a heck of 1.5 years, but people are kind of short-term thinking. So they're a little concerned. But we like what we're seeing in the Bitcoin world. A lot of what's driving this current Bitcoin adoption cycle is it's used as an inflation hedge, right? We just saw a U.S. PPI print of 9.6% in November. That was the highest on record since it began being tracked in 2010. And big time investors like Paul Tudor Jones calls Bitcoin his inflation hedge of choice, as do millions around the world. I mean, all you have to do is look at a map of Bitcoin usage, and almost every country with high inflation has just a ton of Bitcoin adoption. So this is kind of the digital gold use case for Bitcoin, right? It has the potential to surpass gold in the next decade. It's currently $1 trillion market cap versus a gold has an $8 trillion market cap. So there's significant room for growth just in the digital gold application. Bond yields are highly negative in real terms. This is a $45 trillion U.S. market. And if inflation is running at 6% or 9%, all those bonds are essentially losing money. So it's quite possible that more people start looking for alternatives such as Bitcoin. The lightning network is gaining a lot of traction. Here's a chart showing the amount of Bitcoin locked up in the Lightning network. All right. Now let's finish up with Eth, next slide, please. Okay. So Ethereum has really become the trusted chain of record for smart contracts, it's used for Dows, NFTs, DeFi and stable coins is taking off. Layer 2 scaling is very promising. If you combine Layer 2 scaling with charging another technology that's hopefully going to help Ethereum scale, you could see jumps in throughput of Ethereum to maybe 20,000 transactions per second, 100,000. They are hypothetical ways you can get there. And this would allow Ethereum to go truly mainstream and onboard millions of new users. Some of these new Layer 1s that are competing with Ethereum like Solana, they're really much more centralized which is why they are faster, but they're also empty and they just don't have the demand Eth do. So we think they're going to face a lot of the same problems eventually, but they don't have the same Layer 2 scaling technology, I don't even think they have it on their road map. Next chart, please. So these are a few of the Layer 2 scaling solutions that are being built on Ethereum, there is now around $5.5 billion in total value locked up upon them. So these are all different solutions that make Ethereum scale better essentially. Next slide, please.

And so that means you can continue with your bit -- with sort of your Ethereum mining and then you can turn around and goes into this network and you could have the fees drop for transferring money, but your still requiring Ethereum mining?

Yes, exactly. So they could scale up to, let's say, 2,000 transactions per second. And then they would settle up those transactions all back on the main Ethereum Blockchain in batches. So 10,000 transactions settled up in 1, and this would allow Eth to really scale to the next level. Next chart, please. This is total value locked in Ethereum Layer 2 projects. And some of the smartest money in the world right now is investing in Layer 2 tech just in terms of venture capitalists. We've seen Andres and Horowitz, Sequoia Capital and Union Square Ventures all investing in major Layer 2 projects recently. These are literally probably 3 of the top venture capital firms in the world, 3 of the top 10. So we're just seeing a ton of interest from PCs, and they think that this thing can scale. And for example, Sequoia Capital recently led a $50 million investment into StarkWare at a $2 billion valuation. So that's a company that makes StarkNet, which is one of the Layer 2 scaling solutions. And Sequoia India is reportedly eyeing an investment in Polygon, which is yet another promising Layer 2. These are just a few examples. There are a lot more, just Google Layer 2, and you'll find tons up of them. Let's see. So scaling is really key for these guys, right? Like right now, demand for Ethereum transactions exceeds the network's throughput. So what does that mean? That means transaction costs go up. Now that's good for us, certainly in terms of revenue. But it also limits the network's potential growth. So we're excited to see these Layer 2 solutions develop. And we really think that as they develop, they're going to help Ethereum and Bitcoin scale to the next level and really reach mainstream levels of scalability. Okay. I think that's it for my slides. Thank you very much.

I just like to comment that what we're trying to share with you is that the ability to go and scale and have less fees is what the coders are doing. And there's a big economic value because of the big by VCs on that. And this doesn't destroy the ability to go and still continue to mine Ethereum. This time last year was the first big staking rush, and we have so many phone calls to go and stake our Ethereum and make 12%. Guess what? We made much, much more holding our coins. And a couple of times, we had to sell Ethereum coins to buy brand-new equipment, to stay so competitive in that marketplace when we have opportunities to capture. So I think it's important to recognize that all the naysayers, all the doubters out there, they can go on and do what they want. But right now, we're not worried about going and staking and earning a small yield on our money. We're going to hold of these coins as much as we can. And if they have huge moves in the time, in a short period of time, then we've shown success in capitalizing and taking some profits. But we just showed you some other visuals that are important to go back on to when you take a look at the growing network of DeFi apps. And it's just important that you can see like the Uniswap ecosystem, just like the Ethereum ecosystem, there's 30,000 scientists around the world and coders and people involved with new products, et cetera, because Ethereum is the backbone to the Blockchain network. Now I'm going to turn it over to hardworking, Mr. Dynamite out there, Mr. Big Special K that just came back from New Brunswick and our facilities and give you an update.

Thank you, Frank, for the wonderful introduction. And I'm very happy and proud to be here at the HIVE AGM giving this presentation alongside my team members and colleagues. So our first slide here shows our hash rate growth through to the end of 2022. Just right off the bat, I'll also add that we have 6 terahash of Ethereum mining capacity, which will actually be installed -- delivered and installed through Q1 2022. So in addition to that is the Bitcoin exahash growth, which is what the bar chart exhibits. So what you see is nice, steady growth we've had through the year as our deliveries of ASICs have come in, our orders from Canaan, MicroBT, Bitman, decentralized and Spirit's Blockchain, we've also been decentralized in our ASIC allocation. And we test and we evaluate the different ASIC systems to see which ones are the most robust and dependable. We've got a fantastic technical team. I spent a week in New Brunswick on the front lines with our technicians and our software leads. So you see this chart here, we get through to 3x a hash of Bitcoin mining capacity through the end of 2022. And with that extra 6 terahash of Ethereum mining capacity, that works out to about an additional 1.3 exahash of Bitcoin mining capacity. What we've been doing lately is helping the investing public and crypto enthusiasts at large understand the conversion ratio of Ethereum hash rate to a Bitcoin hash rate. And as it stands, every terahash of Ethereum mining capacity you have is about -- to a little over 200 petahash of Bitcoin mining capacity. So that's how you get to 4.3x exahash equivalent. And as Frank mentioned, we hit our 1 exahash milestone earlier this year in the summer as evidenced on this chart. So a lot of growth. And yes, let's go to the next slide. So we talk about hash rate, but one thing that HIVE has a lot of expertise in is being a great data center developer. And coming back from New Brunswick and seen there was -- we had a whole team their construction management, the engineers. I did a slight walk-through. And one thing that I'll note is we have very, very high petahash per megawatt and very high profit density per megawatt. And more on that later, but what I'll quickly outline today, what people may not realize is with our building 3 that just completed, and so that was a big milestone that I was able to witness firsthand and our team was plugging hundreds and hundreds of miners in per day. We, HIVE now has 109 megawatts, almost 110 megawatts really of completed infrastructure today. And by the end of January, so in about 6 weeks, we're going to be at almost 130 megawatts. So this is 130 megawatts of green and clean, high-efficiency infrastructure that our teams in Sweden, Iceland, Quebec and New Brunswick seamlessly operate and integrate on a daily basis. And earlier in the presentation, when Frank was doing the comparison chart, what you'll notice is HIVE actually has the highest Bitcoin per petahash amongst our peers. And what does that mean? I think people take for granted the amount of effort it takes once you deploy and build your data centers to have HIVE uptime and to ensure that you're scoring in your pool and that you're not getting latency or disconnects between what's happening in your mine and what's actually scoring in your pool. Because remember, cryptominers, we're in the hash rate commodity business. We produce hash rate, and we have an agreement with the booster in cryptocurrency. If you're not seeing that supply chain through to the end, you're going to be missing dollars on your income statement. And so backed by a very hard-working financial team, second-to-none technical team, we've had some really fantastic high-efficiency output numbers on our petahash. So I'm very excited. This makes us, in terms of current cash rate and operations, one of the largest globally. So I'm very excited about hitting 130 megawatts. Now on the -- the follow-through to the megawatt capacity by getting to that 130 megawatts by the end of January to date, we're at about 2.4 exahash a bitcoin equivalent. And that's again a sum of our Ethereum footprint in our Bitcoin mining footprint. Literally, there was pallets and miners arriving as I was in New Brunswick, just last week with our team. So we're going to be at 2.65 exahash by New Year. And by the end of January, we've got some more GPUs coming in and more ASICs. So we're going to be a 3 exahash equivalent. That's about a 25% increase from where we are today in about 6 weeks. And again, that just speaks to the strength of our team. And pictured here is the hot aisle of our New Brunswick facility, seamless military-grade cryptomining data center design. So let's look at the next slide here. So here's some other photos. That's actually our third building which just completed on the top left corner, and you could see our fourth building, which is underway, which, by the way, when that fourth building is complete later in Q1, we'll be at 70 megawatts just at this 1 campus and 150 megawatts globally. One thing that I'll note, we actually had CDC News -- national news out there, interviewed myself, they interviewed Luc Ouellette, who is our Regional Director of New Brunswick and the mayor came out. We -- HIVE loves to work with the community, get engaged with the municipal authorities. And it was fantastic. I got to meet all of our local team. We have 12 full-time employees right now at our data center New Brunswick. That's going to go to 20 full-time employees once we hit our 70 megawatts. And I got a chance -- the photo didn't make it here, but we had 75 engineers and construction workers because as you could see with the heavy machinery, this is full-on infrastructure development, substations, transmission lines, all the distribution, all the electrical, even the start to engineering Eth, You have screw piles, you see the foundations being built 13 feet below grade. So it just makes me so proud and enthusiastic to see it all come together. And again, we're in the hash rate commodity business. We deliver it very high efficiency, and we hire locally. The 75 construction workers that we have on our site, they're all from within the town. So now let's talk a little bit about the macroeconomics. So again, HIVE is a Bitcoin and an Ethereum mining company. So where we are right now, this is the cents per megahash per day, right? So this is globally for the entire Materia mining network, we're about $0.07, $0.08 per megahash per day right now. And that -- and a year ago, right, if you look at this graph, we were below the $0.05 mark, we're about $0.04 or $0.05 per megahash per day. So Ethereum mining is actually about 50% more profitable today than it was a year ago. And more to the point, again, as Adam and Frank did a great job of framing the FUD around Ethereum of mining is going to go to proof a stake in EIP-1559. And you could see right here, EIP-1559 came in early August of 2021. You can actually see the mining economics for Ethereum in the months that followed, we're actually stronger than before EIP-1559. All the EIP-1559 did, the London Hartford as it's known, is attenuating those really high transaction fees that you saw in February and May, and that's good for the ecosystem. Why? Because it makes Ethereum more affordable and sustainable to use as a payment mechanism and also commit your NFTs and all the other things. Now the Bitcoin mining profitability chart here which you've seen. We're at about $0.25 per terahash per day, and that's up from about $0.18 per terahash per day at the beginning of the year. So again, strong growth in the Bitcoin mining profitability, about 50% up from the year-end. You will notice actually that Bitcoin mining profitability has been a little bit more volatile this year as we saw the miners drop off in China and the price correction. So Ethereum mining has actually been a very steady hand. And again, HIVE having both Ethereum and Bitcoin mining, it gives us very robust and steady income. So next slide, please. So the Bitcoin price over the 1-year period, again, you sort of see this reflect what the mining profitability looked like. There was a bit of a correction over the summer, but we're still up on the year, nicely Bitcoin is almost double where it was at the beginning of the year and low 20,000 range. Now we're in the just sub 50,000 range. So again, Bitcoin is digital gold has shown a lot of resilience. Next slide, please. But here, Ethereum is actually up 4x. 4x what it was a year ago, right? A year ago, it was under $1,000. There we're holding strong at about $4,000. So again, for a crypto and the easiest in the investing public, having exposure to Ethereum...

And that's why we didn't stake our coins to make 12%.

Exactly.

We ended up making 400%. And this has been a huge economic benefit to the HIVE shareholders.

Exactly. And so that's how we've been having really fantastic record-breaking financials, both Q1 and Q2 back to back. And so -- this is a slide here where we talk about our Bitcoin per petahash and our petahash per megawatt. So I'm going to get a little bit technical here for a moment. So HIVE here's highlighted. So we mined an equivalent of 389 Bitcoin in November, and that's the composite of our Bitcoin and Ethereum. As you can see, HIVE, our ETC per petahash is 0.162, which is the highest of all of our peers. I mean you could see some of the companies are almost 1/3 of that figure, if not at least 10% to 20%. Bitfarm is our industry peer, they're high efficiency. They're similar to us. But this is where we're at the vanguard of -- at high efficiency and high technical proficiency that I was talking about. And in fact, one thing -- in addition, we -- when we produce 389 Bitcoin in November, we only had 88 megawatts running, right? And so the Bitfarms actually has 106 megawatts running. So on a petahash, the other thing for people to pay attention to is the petahash per megawatt. HIVE, when you convert the Ethereum per petahash rate, we're at a 25 petahash per megawatt right now, right? So very high efficiency hash rate per megawatt. The profit density of our operations as a function of both the Bitcoin and the Ethereum mining is second to none. And so this is what I was alluding to earlier. And so you've got great people in the blogosphere, Blaney and Holly and these guys are great at parsing out these technical things. And sometimes we like to provide the numbers as well for the investing public. So that's another thing. So we don't just grow for the sake of scaling, we try to be high efficiency, high profit margin when we grow. So pound for pound, we can be the best crypto miner. And on that note, I turn it over to Darcy, hardest CFO -- hardest-working CFO in the crypto industry.

Thanks, Aydin.

Mr. [indiscernible].

All of our CFOs work hard, no matter what industry, but thanks a lot. I appreciate it. So I'm just going to quickly go through HIVE by the numbers. A lot of this stuff touched on by Frank, Aydin and Adam. As you can see, we're continuing as we're plugging in our machines to increase our hash rate, both in Bitcoin and also in Ethereum. Bitcoins up by 35%, Ethereum by 14%. This is just a continuation of our commitment to investing in our company, investing in new machineries and also expanding our footprint with higher output facilities and getting the best equipment that we can at the best price. And as a factor of the most recent financing that we did, we're well financed from a cash point of view and also we're very well capitalized with our portfolio of crypto assets over $170 million. And with everything within the company, it's a strong relationship that HIVE has that enables us to have these low energy rates and access to both Bitmain, MicroBT and Canaan to get the best equipment that we can at the best price. Moving on, on to the next slide. This is taking a quick look at our facilities, where they are within the world. As you can see, we focus on the cold energy -- sorry, cheap in energy in cold northern climates. We try to use -- make use of that cold ambient temperature in places like Iceland, Sweden and also in Canada and also have access to low-energy, hydroelectric power in all of our facilities, which were green energy, we only use that. And also, we have access to geothermal while we're in Iceland. Next one. As you just take a look at the chart of the Ethereum that we've mined over the last number of quarters, as you can see, the number of Ethereum that we've been mining has been dropping since about a year ago in September of 2020. That has to do with just the increase in the price of Ethereum. And all the gamers and everyone else plugging in their computers, making use of that high-powered GPUs that they've got to mine Ethereum. So even though the number of Ethereum we are producing and mining has dropped, that's more than offset by the increase in the price of Ethereum over the last year. And you can see we are continuing to mine, have quite a bit there. This is the same thing in the Bitcoin. Except -- as you can see, we're continuing to move up, and this is because of the acquisitions we made in 2020 of the 30-megawatt facility in the Quebec. And then you can see that huge jump in September of 2021. That's with bringing the data center in New Brunswick online, and we're continuing to build that Bitcoin mining capacity as we move forward. Moving on. In social media, every CFO within the industry is so enthusiastic about social media, but honestly, all kidding aside, this is the way that people communicate these days. And this is what HIVE tries to do is use the different channels that are available to us so that our story can be available to anybody, no matter what kind of connection they have to the Internet, whether it's Instagram or Twitter. And we're always here through our YouTube channel and the videos that we put out there, so our investors can get the information they need to make the best decisions and to learn more about HIVE and the ecosystem that we operate in.

Thank you. Thank you, Darcy and Aydin and Adam for giving a detailed presentation. And in particular, happy holidays to all our shareholders and thank you for being patient with us throughout the year and the ups and downs as we focus on delivering for you the highest revenue per share and cash flow per share that we can work with a full focused work ethic. So thank you all, and happy holidays.