Hive doubles down on Paraguay Bitcoin mining as competitors chase HPC boom
Hive Digital Technologies is pushing ahead with an aggressive build‑out of Bitcoin mining and high‑performance computing (HPC) infrastructure in Paraguay, even as price swings and leverage‑driven liquidations rattle the broader crypto market.
Executive chairman Frank Holmes said in a recent interview that the company is deliberately looking past short‑term volatility and market sentiment. In his view, the latest pullback in Bitcoin has far more to do with speculative leverage than with any deterioration in fundamentals.
According to Holmes, the recent weakness came after a wave of overextended traders were forced to unwind positions. That cascade created what he called a temporary “contagion” effect: the appearance of intense selling pressure without a corresponding rush of real capital exiting the space. The issue, he stressed, was leverage, not collapsing demand. When buying is funded by borrowed money rather than cash, any forced exit can drag prices sharply lower in the near term.
Despite that turbulence, Hive has been scaling its core operation. Holmes reported that the company has increased daily Bitcoin (BTC) production from roughly three coins per day to around ten, more than tripling output in a relatively short period. The goal, he said, is to keep expanding capacity while network difficulty, energy markets and infrastructure costs still present attractive economics.
While Hive builds out its traditional mining portfolio, many of its industry peers are moving in a different direction. Large publicly listed miners such as Bitfarms, Marathon Digital (MARA) and Hut 8 have announced sizable investments in HPC data centers or broader strategic shifts toward computing services. For these companies, high‑performance computing – powering workloads like AI, machine learning, rendering and scientific simulations – is increasingly seen as a way to smooth out the boom‑and‑bust cycles of purely mining‑driven revenue.
Holmes, however, rejects the idea that miners must choose between Bitcoin and HPC. He described Hive’s strategy as deliberately “parallel”: build and operate both lines of business rather than setting them up as rivals. In his framing, neither is inherently superior. Bitcoin mining offers direct exposure to digital asset upside, while HPC delivers more stable, contracted cash flows. The two together form a portfolio approach to digital infrastructure.
He went further, arguing that Bitcoin mining can actually accelerate entry into the HPC market. The fastest way to finance and construct top‑tier compute facilities, he said, is first to establish robust Bitcoin data centers. The power infrastructure, cooling systems, land acquisition and operational know‑how required for mining can later be repurposed or expanded for HPC workloads, which often demand similar physical footprints but different hardware profiles and client relationships.
Paraguay sits at the center of this long‑term plan. Hive has identified the country as one of its key growth markets for both mining and advanced data center projects. The company intends to develop large‑scale power connections and data infrastructure there, leveraging Paraguay’s ample electricity and relatively favorable policy stance toward foreign investment and Bitcoin operators.
Holmes characterized Paraguay as uniquely aligned with North American interests in the region, calling it “the only country in Latin America that is really pro‑America.” He praised the current administration for creating an environment in which industrial‑scale Bitcoin miners can partner with utilities rather than operate in a legal gray zone. In his telling, predictable rules, long‑term contracts and an open attitude to digital asset infrastructure make Paraguay stand out from many neighboring countries.
Historically, Paraguay has generated more electricity than it consumes domestically, particularly from large hydroelectric assets. That surplus has typically been exported to nearby nations. Holmes highlighted that arrangement as a source of tension and unpaid bills: he pointed to Argentina’s outstanding electricity debt to Paraguay, which he said exceeds 200 million dollars. When buyers delay or avoid payment, power producers and the national grid shoulder the risk.
Bitcoin mining, he argued, changes that equation. By placing energy‑intensive data centers close to generation sites, miners can absorb otherwise stranded or underpriced power and turn it into a steady revenue stream. Unlike some regional buyers with checkered payment histories, Holmes emphasized that miners sign contracts and settle obligations each month. In his words, “Bitcoin miners save the day. The utility providers get paid every month. Not only do we build substations all across the country, we pay them every month.”
Hive’s vision in Paraguay goes beyond a few isolated facilities. The company plans to construct data centers there that will rank among its most powerful globally, designed to host both Bitcoin mining rigs and, over time, HPC‑capable hardware. This dual‑use approach gives Hive flexibility: infrastructure initially deployed for mining can later be optimized for AI inference, cloud services or other compute‑heavy verticals as demand evolves.
Holmes made it clear that short‑term price declines will not derail these capital projects. He acknowledged that Bitcoin “can come off in the short term,” but said that such moves do not alter Hive’s core thesis or five‑to‑ten‑year horizon. Infrastructure, he noted, is planned and financed over many years; trying to time every market fluctuation would paralyze growth and surrender strategic ground to more patient competitors.
From a financial perspective, the expansion into Paraguay also serves as a hedge against rising operating costs in more mature markets. Access to abundant electricity at competitive rates can materially improve mining margins, especially as network difficulty climbs and halving events reduce block subsidies over time. By locking in long‑duration power agreements and building substations in partnership with local utilities, Hive aims to create a cost base resilient to energy price shocks.
There is also a regulatory diversification angle. As some jurisdictions experiment with restrictive rules, moratoriums on new mining facilities or uncertainty around environmental reporting, miners with a single geographic footprint face elevated risk. Establishing major sites in Paraguay gives Hive exposure to a different policy cycle and reduces its dependence on any one country’s stance toward Bitcoin or data center development.
The move into HPC further broadens the company’s resilience. While Bitcoin mining revenue is directly tied to hash price – a function of BTC price and network difficulty – HPC income often comes from fixed‑term contracts with enterprise or government clients. This may allow Hive to stabilize cash flow, supporting debt service and reinvestment even during crypto bear markets. Holmes framed this as not abandoning Bitcoin, but surrounding it with additional, less correlated revenue sources.
Strategically, the interplay between mining and HPC could shape how Hive allocates capital across cycles. In periods of high Bitcoin prices, proceeds from mining might be reinvested into expanding both hash rate and HPC capacity. During downturns driven by leverage unwinds or macro shocks, HPC contracts could, in theory, subsidize ongoing operations and allow Hive to avoid the forced asset sales that have plagued weaker miners in past bear phases.
Holmes’s argument rests on a conviction that Bitcoin’s long‑term adoption path remains intact despite these episodes of leveraged excess. He views recent volatility as part of a maturing asset class shaking out speculative capital, rather than a sign that institutional or retail interest is evaporating. As long as the network continues to secure value and attract new participants, he believes that well‑capitalized, low‑cost miners with diversified revenue – like the one he is trying to build in Paraguay – will remain core infrastructure providers in the digital economy.
The Paraguay build‑out also highlights a broader shift in how mining companies present themselves. Rather than positioning as pure “crypto” plays, firms like Hive increasingly describe their operations as energy‑backed digital infrastructure businesses. That framing matters for regulators, investors and local communities: a data center that stabilizes grid demand, pays its bills on time and supports jobs is often more politically palatable than a speculative image of “coin factories.”
At the same time, the strategy is not without risks. Changes in Paraguay’s political leadership, renegotiations around power exports, or new environmental requirements could alter the economics of mining and HPC projects. Holmes appears to be betting that building tangible infrastructure – substations, transmission lines, data halls – and embedding Hive within the national energy system will make the company a valued partner rather than an easy target when policy debates arise.
For now, Hive is signaling that it intends to scale, not retreat. Tripled Bitcoin output, parallel investment in HPC, and a bold bet on Paraguay’s power surplus all point to a company using market stress as an opening to expand. Whether that conviction pays off will depend on how Bitcoin’s next cycles unfold, how quickly demand for high‑performance computing accelerates, and how stable Paraguay remains as a host nation for large‑scale digital infrastructure.