Transforming Bitcoin Mining in Paraguay
As the global cryptocurrency landscape continues to shift, one executive is making a significant wager on Paraguay’s hydroelectric capabilities to reshape sustainable Bitcoin mining. Frank Holmes, who serves as the chairman of HIVE Digital Technologies, is orchestrating a crypto transformation from an unexpected location: Paraguay. By harnessing the country’s abundant hydroelectric resources, HIVE plans to increase its mining capacity fourfold by 2025 while incorporating artificial intelligence (AI) into its operations. Holmes, a veteran in finance and a speaker at the Consensus festival in May, provided exclusive insights into this ambitious expansion strategy.
The Renewable Energy Treasure of Paraguay
Paraguay’s Itaipu Dam stands as the largest hydroelectric power plant in the Western Hemisphere, generating 14 gigawatts of electricity, with half of that capacity going unused and flowing into Brazil. HIVE has strategically tapped into this unutilized power, turning it into opportunities for Bitcoin mining. “We monetize stranded energy,” Holmes explains, emphasizing that Paraguay benefits economically while HIVE gains access to inexpensive and clean energy. The favorable business climate fostered by President Santiago Peña further enhances the opportunity, as low taxation and stable regulations make Paraguay a more appealing destination for crypto ventures compared to the unpredictable policies in the U.S. Additionally, HIVE’s infrastructure investments are poised to stimulate job creation and bolster the local economy.
Shifting from Bitcoin to Artificial Intelligence
Following Ethereum’s transition away from energy-heavy mining in 2022, HIVE quickly adapted its strategy. The company swapped out 130,000 AMD chips for Nvidia’s superior GPUs, marking its entry into the AI computing sector. “It’s like trading a Bronco for a Ferrari,” Holmes jokes, emphasizing the significant technological upgrade. However, the shift to AI comes with increased operational demands. Mining setups require about $1 million per megawatt, while AI infrastructures can cost $10 million, not including the necessary equipment. The need for reliable power backups and consistent operation adds layers of complexity to this transition. Nevertheless, Holmes remains optimistic: “Diversifying into AI secures our revenue for the future,” he notes, highlighting that AI contributed $2.6 million to the company’s earnings last quarter.
Acquisitions Driving Expansion Goals
HIVE’s expansion trajectory accelerated in March 2025 when it acquired Bitfarms’ 200-megawatt Yguazú facility for $56 million. With the addition of a new 100-megawatt site, HIVE’s operations in Paraguay are set to reach a total capacity of 300 megawatts by mid-2025. Overall, the company’s global capacity will amount to 430 megawatts, sufficient to supply power to approximately 86,000 households. This acquisition followed a period of leadership challenges at Bitfarms and an unsuccessful takeover attempt by Riot Platforms. The temporary mining tariffs in Paraguay, which are now nearing expiration, added to Bitfarms’ difficulties. “Their loss became our gain,” Holmes remarks. HIVE is now on a fast track to deploy 6,500 high-efficiency ASIC miners, aiming for a processing power of 25 exahashes per second by September.
Overcoming Regulatory Challenges
While HIVE steers clear of U.S. operations due to perceived regulatory overreach, Holmes is mindful of index requirements that necessitate a U.S. base. Proposed increases in energy prices in Paraguay for 2024 tested HIVE’s resilience. “We champion stable policies,” Holmes emphasizes, underlining HIVE’s role in stabilizing the grid. Following the Bitcoin halving event in April 2024, mining rewards reduced by 32%, putting pressure on profit margins. However, HIVE’s commitment to efficiency, with a rate of 16.5 joules per terahash, offers protection against market volatility. “Debt-fueled expansions sink competitors,” Holmes cautions, referring to rivals who took excessive loans backed by Bitcoin during market peaks.
Economic Growth and Global Aspirations
HIVE’s energy purchases generate $100 million annually for Paraguay, enhancing local infrastructure. Concurrently, HIVE anticipates yearly revenues of $300 million at 15 exahashes, a figure projected to double by 2025. “Everyone benefits,” Holmes asserts, highlighting job creation and growth in the tech sector. On a global scale, HIVE is exploring untapped hydroelectric potential in Ethiopia. “Stranded energy is a global phenomenon,” Holmes observes, although political uncertainties remain. Drawing on 35 years of experience in resource financing, he is optimistic about decentralization as a means to sustain Bitcoin’s ecosystem amid increasing corporate interest similar to MicroStrategy’s investment strategies.
The Vision for Sustainable Mining
Holmes envisions a future for Bitcoin miners akin to the gold industry, where only the most efficient operations will succeed. “Royalty models have safeguarded gold companies; we are adopting similar strategies,” he states, referring to HIVE’s streamlined operations. Simultaneously, HIVE is investigating Bitcoin’s Layer-2 solutions, such as the Lightning Network, to maintain its competitive edge. As the Consensus Festival approaches, Holmes’s message is clear: sustainable mining is not just an option; it is essential for survival. With Paraguay as a model, HIVE is determined to demonstrate that the future of cryptocurrency lies in the synergy between renewable energy and artificial intelligence. “The energy transition begins here,” he proclaims. Holmes will expand on these strategies at the Consensus festival in Toronto, scheduled for May 14-16. As Paraguay’s dams buzz with activity, the world is closely observing whether this fusion of cryptocurrency and clean energy can usher in a new era.
