Frank Holmes never intended to build an artificial intelligence company. When he co-founded HIVE Digital Technologies in 2017, his goal was straightforward: create a workaround for stalled Bitcoin exchange-traded fund (ETF) approvals by launching a public mining operation. Yet eight years later, HIVE has evolved into something far more valuable—a renewable-energy-powered infrastructure company positioned at the intersection of cryptocurrency and AI growth.
In an interview with The Wealth Advisor’s Scott Martin, Holmes, Co-Founder and Executive Chairman of HIVE, explained how regulatory frustration led to a business model that now generates revenue from both sectors while owning the essential hardware both industries require.
The transformation reflects a broader shift in how savvy investors approach volatile technology sectors. Rather than betting on individual cryptocurrencies or AI software companies, HIVE offers advisors exposure to the picks-and-shovels infrastructure powering the digital economy’s expansion.
From Regulatory Frustration to $230 Million Launch
Holmes conceived HIVE as a direct response to regulatory roadblocks preventing Bitcoin ETF approval. Anti-money-laundering and know-your-customer concerns had stalled ETF applications, but Bitcoin miners avoided compliance complications entirely by producing virgin coins with no transaction history. “HIVE was my answer in 2017 when the regulatory world wouldn’t let you have a Bitcoin ETF. I co-founded, launching the first crypto mining company to go public,” Holmes recalls.
Institutional investors recognized the strategy’s merit immediately. Fidelity led with a $100 million investment, joined by three other institutions contributing another $100 million. The $230 million total raised at launch demonstrated sophisticated investors’ appetite for regulated cryptocurrency exposure through productive assets rather than speculative holdings.
HIVE differentiated itself through its renewable energy focus from inception. Operations began in Iceland using geothermal power, expanded to Sweden’s hydroelectric resources, and later entered surplus hydro markets along the Maine-Montreal corridor. The renewable energy commitment addressed environmental concerns while securing cost-effective power access—a strategic advantage that would prove crucial as the company expanded into AI hosting.
Paraguay Powers Revenue Explosion
HIVE’s most transformative expansion occurred in Paraguay, home to the Itaipú Dam, one of the world’s largest hydroelectric facilities. The country’s surplus renewable energy capacity and pro-U.S. stance have created ideal conditions for large-scale data center operations. “[It’s] a beautiful country, one that just loves America, and that always makes it much easier coming into a country that is pro-America,” Holmes observes.
The Paraguay expansion has transformed HIVE’s financial profile dramatically. Daily revenue has increased from approximately $250,000 to $800,000, according to Holmes, who projects that the company is positioned to reach $1 million per day soon—all accomplished with just 25 employees. “The revenue per employee is greater than that of Nvidia or Apple,” he notes.
Revenue concentration with minimal staff expansion demonstrates the scalable nature of data center operations. Unlike labor-intensive businesses requiring proportional workforce growth, HIVE generates increasing returns through strategic equipment deployment rather than headcount additions.
The Natural Evolution into AI Infrastructure
HIVE’s transition from cryptocurrency mining to AI hosting emerged organically as these sectors share fundamental infrastructure requirements. High-performance computing, massive energy consumption, and sophisticated cooling systems serve both Bitcoin mining and AI applications equally well. Holmes has invested more than $140 million in Nvidia chips across multiple purchases, creating GPU capacity now rented hourly to upwards of 10,000 accounts worldwide.
Venture capital’s heavy focus on artificial intelligence—Holmes estimates 70% of recent VC allocations target the sector—has created enormous demand for GPU access amid supply constraints. HIVE’s early hardware investments positioned the company to capture AI hosting revenue as the market expanded rapidly. “We’re in a secular bull market for AI, and HIVE is well positioned,” Holmes says.
The dual-revenue model provides operational flexibility unavailable to pure-play businesses. HIVE can shift computing capacity between cryptocurrency mining and AI hosting based on relative profitability, maximizing returns from fixed infrastructure investments. “When you look at a Bitcoin mining industry and you look at AI, the commonality is data centers,” Holmes says. “So, the real thirst and drive are for data centers.”
Infrastructure Precedence Creates Competitive Moats
Bitcoin mining operations establish infrastructure foundations that AI companies later require. Miners invest first in transformers, transmission lines, cooling systems, and data center facilities—assets easily repurposed for artificial intelligence applications. “The stepping stone for building that infrastructure, the transformers, the big cable wires, all that foundational infrastructure begins with Bitcoin,” Holmes says. “Bitcoin miners are the first to get their money back, build up that. And now that’s being repurposed for AI in many locations.”
Major technology companies including Microsoft, Amazon Web Services, and Google compete aggressively for energy access and data center capacity. HIVE’s established renewable energy relationships and operational facilities provide competitive advantages as hyperscalers scramble for computing resources.
The infrastructure-first approach has attracted acquisition interest from AI-focused companies seeking immediate capacity access. Holmes cites CoreWeave’s acquisition of Core Scientific as validation of infrastructure value, noting how AI companies are acquiring Bitcoin mining operations specifically to access their electrical capacity and data center facilities. “We see CoreWeave, which has now taken over Core Scientific to get their electricity. And they were a data center for mining Bitcoin. And now they’re going into the AI business. So, they’re just buying them out to get that,” Holmes explains.
Valuation Re-Rating Opportunity
HIVE’s evolution from cryptocurrency miner to data center operator creates potential for significant valuation re-rating. Data center operators typically trade at five times revenue multiples, compared to lower valuations assigned to mining companies. Holmes discusses the potential for significant changes in HIVE’s valuation based on this disparity, noting the company’s projected revenue trajectory. “We should be hitting, by American Thanksgiving, $500 million annual run rate revenue,” he projects. “So, that would say 2.5 billion.”
Analyst recognition of HIVE’s transformation supports higher price targets as the market begins to view the company through a data center lens rather than traditional mining metrics. “And that’s why most of the analysts are calling $10 to $12 of a stock price, because that’s where they see it as going through the re-rating as a data center—not a Bitcoin miner, even though we do mine Bitcoin,” Holmes says. “HIVE is in this unique position with the biggest growth of all the crypto mining companies this year. But really, we’re a data center business.”
The valuation disconnect reflects market categorization challenges rather than operational fundamentals. HIVE operates diversified data center facilities serving both cryptocurrency and AI clients, yet trades at mining sector multiples. As AI revenue components grow, market recognition should align with technology infrastructure comparables.
Energy Demand Drives Strategic Value
Artificial intelligence applications consume staggering amounts of electricity, creating enormous strain on power infrastructure. Every AI query processed by large language models requires GPU execution, with each processor drawing significant power. “Every time you ask [ChatGPT] a question, you’re touching a GPU, and you’re sucking on energy. You turn that light bulb on every time you ask a question,” Holmes says.
The energy intensity of AI operations explains Nvidia’s market dominance and ongoing hardware shortages. Companies with established power access and cooling infrastructure hold substantial advantages over competitors facing energy constraints and rising utility costs.
HIVE’s renewable energy focus addresses both cost and sustainability concerns while providing reliable power access for expansion. The Paraguay facility’s hydroelectric capacity supports current operations while potentially enabling future growth as AI demand accelerates.
Portfolio Defense Through Hard Assets
Holmes discusses HIVE ownership within the broader context of portfolio protection strategies that address monetary debasement risks. Persistent deficit spending and currency concerns support allocations to hard assets including Bitcoin, gold, and infrastructure companies. “When we have all this deficit spending, it gets a negative narrative,” he says. “Then you’re smart. You just go buy some Bitcoin, and you buy a Bitcoin miner like HIVE, and you buy some gold. You buy some GO GOLD. That’s how you protect your purchasing power.”
The infrastructure approach provides cryptocurrency exposure through productive assets generating operational cash flows. Unlike direct Bitcoin ownership subject to volatility without income, HIVE’s mining operations and AI hosting services create downside mitigation through diversified revenue streams.
Building on allocation strategy, Holmes recommends the “10% golden rule”—allocating 10% of a portfolio to gold and 5% to Bitcoin—and emphasizes the accessibility of Bitcoin investing. Each Bitcoin contains 100 million satoshis, making it possible to build exposure through small, regular purchases. “You don’t have to have $120,000 to buy Bitcoin. You could turn around and do it at $1,000 a month,” Holmes explains, adding that investors buying Bitcoin ETFs with $1,000 monthly are acquiring nearly 1 million satoshis. “You’re really buying the best penny stock in the world,” Holmes adds.
Stablecoin Adoption Accelerates Infrastructure Demand
Holmes draws parallels between stablecoin development and the money market fund boom of the 1980s, which redirected cash flows from bank deposits into higher-yield instruments and ultimately equity investments. He suggests that widespread stablecoin adoption could create similar capital flow patterns while increasing demand for digital infrastructure.
Recent regulatory progress provides a framework for institutional adoption, increased transaction volumes, and infrastructure stability. “The Genius Act being passed is a game changer,” states Holmes, referring to stablecoin legislation creating institutional frameworks for digital asset integration into traditional financial systems.
Stablecoin growth may create indirect benefits for Bitcoin and mining operations as digital currency adoption normalizes cryptocurrency usage across broader populations. “What happens when the world goes to all these stablecoins? What does that mean for Bitcoin? Means much higher prices,” he says. As more people become comfortable with digital currencies through stablecoins, the infrastructure supporting cryptocurrency networks may become increasingly valuable, potentially creating additional revenue opportunities for companies such as HIVE.
Positioning for Long-Term Growth
HIVE focuses on building sustainable competitive advantages rather than chasing short-term market movements. The company’s consistent investment in renewable energy access, hardware upgrades, and facility expansion has positioned it to potentially capture growth opportunities across multiple technology sectors regardless of which specific applications ultimately dominate.
The infrastructure-first strategy creates optionality unavailable to specialized businesses. Whether cryptocurrency prices rise or AI applications proliferate, HIVE’s data centers and computing capacity remain valuable assets that have generated cash flows from whichever sector shows stronger demand at any given time.
HIVE’s transformation from regulatory workaround to essential infrastructure provider demonstrates how adaptable business models can position growth across multiple high-technology sectors. Advisors seeking exposure to both cryptocurrency and artificial intelligence trends may find that the company offers ownership of the renewable-energy-powered backbone both industries require to scale globally.
Wealth Advisor/HIVE Webinar: The Hardware Behind the Hype
Date: August 26, 2025
Time: 1:00 PM CST
Duration: 45 minutes
Frank Holmes will share how HIVE Digital Technologies seeks to capitalize on both cryptocurrency mining and AI hosting by owning the essential infrastructure powering both sectors. The session will cover revenue models, renewable energy sourcing, and how data centers can serve as a hedge against volatility in speculative tech markets.
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