Mr. Frank Holmes reports

HIVE BLOCKCHAIN PROVIDES JANUARY 2023 PRODUCTION UPDATE AND BITCOIN HODL INCREASE OF 20% ON YEAR-OVER-YEAR BASIS

Hive Blockchain Technologies Ltd. has released the production figures from the company's global bitcoin operations for the month of January, 2023, with 260 bitcoin produced in January, plus $180,000 (U.S.) of income from grid balancing, and a current BTC hodl balance of approximately 2,430 bitcoin mined with green energy, representing an approximate 20-per-cent year-over-year growth (2,043 bitcoin hodl in January, 2022). The company notes its year-over-year monthly production in January, 2023, is consistent, during a period where BTC mining difficulty has gone up approximately 60 per cent. Additionally, Hive does not have any equipment financing or BTC backed loans.

Summary overview:

• Hive produced 260 bitcoin in the month of January, from ASIC and GPU mining operations, representing an average of 110 bitcoin per exahash. A 21-per-cent month-over-month increase, compared with December, 2022 (214 bitcoin produced).
• Hive's year-over-year monthly bitcoin production was consistent (260 bitcoin in January, 2023, and 264 bitcoin in January, 2022), during a period where the bitcoin network difficulty increased approximately 60 per cent.
• Hive earned $180,000 (U.S.) in income from balancing the grid, in addition to bitcoin produced in January. Based on the daily bitcoin prices during the month of January, the income from grid balancing would equate to a mined value of 10 bitcoin.
• Hive deployed over 6,700 new-generation ASIC miners in its data centres, representing one of the largest upgrades in the company's history, to improve its gross mining margin and fleet efficiency.
• Hive has deployed over 3,200 BuzzMiners in its facilities in Sweden and Canada. These miners are from the 5,655 BuzzMiners manufactured, tested and received to date.
• Hive has fully deployed all the 3,570 S19j Pro miners acquired in December, 2022, into its New Brunswick and Lachute facilities. As a result of in-house software improvements by Hive's technical team, it further increased its efficiency at its New Brunswick site by approximately 20 per cent in average joule per terahash efficiency.
• Hive expects to receive an additional 645 BuzzMiners in the next two months, representing a total production quantity of 6,300 BuzzMiners powered by the Intel Blockscale ASIC for the initial production run. Hive is the first company in the world to commercially deploy thousands of its own bitcoin ASIC miners powered by the Intel Blockscale ASIC.
• Hive sells all of the bitcoin earned from its GPU mining hash rate, with a focus to hodl the green bitcoin mined from ASICs.

January, 2023, production figures

Frank Holmes, executive chairman of Hive, stated: "We are very happy to have overcome several big headwinds over the past year, [with] bitcoin prices falling 50 per cent, the global difficulty surging 50 per cent, which means fewer coins mined unless you increase both the efficiency of ASIC chips and number of machines mining which Hive has done. Even with huge headwinds like the FTX bankruptcy and contagion, the Hive management team has stayed focused and increased its BTC production and our hodl bitcoin position. Further, we have pivoted with our GPU chips away from ethereum after the merge and are using [artificial intelligence] to mine alternative coins and convert into bitcoin; thus, we are able to generate bitcoin revenue. We have decided to sell the BTC earned using GPU/AI and strive to hodl our bitcoins created from hydro and geothermal electricity. We have not been using our ATM since Nov. 30, 2022, and have been able to create other sources of revenue from balancing the grid to selling back energy while deploying the new Intel BuzzMiners and purchased other highly efficient ASIC machines from internal cash management. Our financial success has been from our company's values, culture and strategy to have propriety software and strong global partnerships. Finally and fortunately, we never borrowed at predatory 12- to 18-per-cent interest rates or kept our bitcoin in crypto exchanges, and I am very proud of the team's agility to adapt thoughtfully and quickly to the many external crises through the crypto winter bear market of 2022."

Aydin Kilic, president and chief executive officer of Hive, noted: "We are proud to be producing 260 bitcoin while also earning over $180,000 (U.S.) this month from our grid balancing initiatives. Our team has deployed over 6,700 ASIC miners in our data centres, including over 3,200 Hive BuzzMiners, powered by the Intel Blockscale ASIC and all of the 3,570 S19j Pros we acquired in December, 2022. Hive was the first public crypto mining company to realize income from its grid balancing program in Sweden. We view grid balancing as part of our core strategy, and whenever possible, we seek to hedge energy prices."

Mr. Kilic continued: "We have increased our overall hash rate by 25 per cent month over month from December, 2022, to January, 2023. We are continuously looking to optimize our allocation of energy as a resource, either to generate hash rate or sell energy back to the grid. Moreover, if unhedged spot prices are uneconomical in a specific jurisdiction, we quickly scale down our production. Additionally, our remaining GPU fleet is now generating approximately $80 (U.S.) per megawatt-hours in revenue, which is similar to the U.S.-dollar-per-megawatt-hour compared to bitcoin ASIC miners in the current bitcoin mining economics. We are constantly optimizing the deployment of our technology resources as a company to optimize profit. These advancements and agility allow us to generate positive gross mining margin during a crypto mining bear market. With a strong balance sheet of over $56-million (U.S.) of bitcoin, Hive is well positioned in the market today."

The company's total bitcoin production in January, 2023, was:

• 260 BTC produced;
• 8.4 BTC produced per day on average;
• 2.68 exahashes of BTC hash rate (BTC ASIC hash rate plus BTC GPU hash rate) as of Jan. 31, 2023, composed of 2.52 exahashes of ASIC BTC hash rate and 0.16 exahash of GPU BTC hash rate (the GPU fleet was curtailed to earn income for grid balancing) as of Jan. 31;
• Monthly average of 2.37 exahashes, which is equal to 110 bitcoin per exahash, composed of an average of 2.28 exahashes of ASIC mining capacity and an average of 90 petahashes per second of bitcoin GPU mining capacity during the month.

Bitcoin hodl update

As of the date of this press release, Hive has approximately 2,430 bitcoin, with a market value of over $56-million (U.S.).

Bitcoin global network mining difficulty is volatile

Network difficulty factors are a significant variable in the company's gross profit margins. The bitcoin network difficulty was 34.1 T as at Jan. 1, 2023, and increased to 39.4 T as at Jan. 31, 2023. Accordingly, bitcoin mining difficulty ended the month about 15 per cent higher than the beginning of the month.

The bitcoin network difficulty is a publicly available statistic that reflects the total number of bitcoin miners on-line and is important in analyzing a company's gross profit margins and number of bitcoin produced. These data are available on many websites.

As more people mine bitcoin (difficulty increases), the daily bitcoin block reward, which currently is fixed at 900 bitcoin per day, gets split amongst more miners; thus, each miner receives a smaller portion of the block reward. Conversely, as bitcoin prices fall, many miners may lose money, and power down, thus taking their hash rate off the network, causing network difficulty to decrease.

Those miners with the lowest costs of production, by virtue of having more efficient machines and/or lower energy costs, are able to continue their production during these volatile cycles. Not all miners will continuously mine during a given month. As a result, some miners will produce less bitcoin than expected, relative to their advertised hash rate. For the foregoing reasons, Hive will self-curtail part of its operations if the unhedged spot energy prices are uneconomical, thereby leaving part of its total gross hash rate unutilized.

All bitcoin miners are striving to use the most efficient bitcoin ASIC chips, and Hive is happy that it has been able to upgrade its global fleet during this crypto market downturn.

ATM equity program update

Effective as of the date hereof, the company has terminated its at-the-market equity distribution agreement under which the company had the option to sell up to $100-million (U.S.) of common shares of the company at its discretion. The company did not offer any shares under the ATM equity program after Nov. 30, 2022. From inception of the ATM equity program to Nov. 30, 2022, the company issued 1,306,474 common shares for gross proceeds of $3,941,736 (U.S.). The ATM shares were sold at prevailing market prices. A cash commission of $118,252 (U.S.) on aggregate gross proceeds from the ATM equity program was paid to the company's sales agent.

About Hive Blockchain Technologies Ltd.

Hive went public in 2017 as the first cryptocurrency mining company with a green energy and environmental, social and governance strategy.

Hive is a growth-oriented technology stock in the emergent blockchain industry. As a company whose shares trade on a major stock exchange, it is building a bridge between the digital currency and blockchain sector and traditional capital markets. Hive owns state-of-the-art, green-energy-powered data centre facilities in Canada, Sweden and Iceland, where it endeavours to source green energy to mine digital assets such as bitcoin on the cloud. Since the beginning of 2021, Hive has held in secure storage the majority of its treasury of ETH and BTC derived from mining rewards. Its shares provide investors with exposure to the operating margins of digital currency mining, as well as a portfolio of bitcoin. Because Hive also owns hard assets such as data centres and advanced multiuse servers, it believes its shares offer investors an attractive way to gain exposure to the cryptocurrency space.

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