Introduction

We’ve covered HIVE Blockchain’s (NASDAQ:HIVE) pivot after Ethereum’s (ETH-USD) transition to Proof-of-Stake (‘PoS’) and showed that the impact of PoS ETH is only expected to decrease HIVE’s top line by 13% under several assumptions. One of the assumptions has been violated while HIVE’s September production update helped fill in the knowledge gap for more accurate expectations.

Prior to the transition, we had only good things to say about HIVE, which include:

• Lower ESG compliance risk (powered by 100% renewable energy)
• Growing Bitcoin (BTC-USD) reserves.
• Acceptable margin of safety in terms of price too hard assets excess of total liabilities ratio
• Significantly lower all-in business cost per BTC by sector standards.

We noted that there was a catch to these findings, which is the late release of HIVE’s CY2022Q1 report. It turns out, we were right to exercise caution. Therefore, this article aims to realign HIVE’s future performance expectations by consolidating CYQ1/Q2 performances in conjunction with our initial analysis and Hut 8’s (HUT) latest guidance.

De-anchoring from historical averages

Prior to 2022Q1, HIVE’s all-in business cost per Bitcoin was anchored near the $20,000 level while operating cost (excluding depreciation) was anchored at around $5,000. This gave us high confidence that there is no material risk of HIVE halting operations and no indications of decreasing retention of mined Bitcoin and Ethereum.

However,…