Mr. Frank Holmes reports

HIVE DIGITAL PROVIDES JANUARY 2024 PRODUCTION UPDATE INCREASING BITCOIN HODL BY 14%

Hive Digital Technologies Ltd. has released the unaudited production figures from the company's global bitcoin operations for the month of January, 2024, with 234.6 bitcoin produced in January. The company maintained over 3.88 exahashes per second of bitcoin mining capacity on average for January, 2024, including ASIC and GPU BTC hash rate (all amounts are in U.S. dollars, unless otherwise indicated).

Summary overview:

• Hive produced 234.6 bitcoin in the month of January, from ASIC and GPU mining operations, representing an average of 60.5 bitcoin per exahash, with an average hash rate of 3.88 EH/s for the month of January, 2024.
• Hive produced an average of 7.6 BTC per day in January, 2024.
• Hive ended the month with 3.85 EH/s of mining capacity, including ASIC and GPU BTC hash rate, a 5.6-per-cent month-over-month decrease.

The company's hodl position at the end of January, 2024, was 1,939 BTC, which was 234.6 BTC higher than the prior month, representing a 14-per-cent increase. All BTC produced was hodl during the month.

Arctic cold weather

Hive mines bitcoin, sourcing geothermal and hydroelectric renewable energy in Sweden, Iceland and Canada. There have been a few days of conserving electricity consumption due to cold weather. The company's software system to balance the grid has worked smoothly, and Hive expects, based on seasonal weather patterns, milder weather in March.

Cold weather in northern Sweden, where the company's facilities are 100 miles south of the Arctic Circle, hit negative 40 C. Fortunately, this seasonal pattern appears to be behind it. In addition, Hive does hedge its cost of energy in Sweden.

Bitcoin halving strategy

Frank Holmes, executive chairman of the company, stated: "We have upgraded our fleet of ASICs to improve our global fleet efficiency to reduce our average production cost per bitcoin. In addition to this, we have been hodling our bitcoin reserves ahead of the halving. With the halving event in April, 2024, the global daily bitcoin block reward will reduce from 900 bitcoin per day to 450 bitcoin per day. This underscores the scarcity of bitcoin, and thus, we believe increasing our hodl will put Hive in a strong position."

Bitcoin ASIC upgrade with S21

Aydin Kilic, president and chief executive officer of Hive, stated: "We are thrilled to announce that we have received and installed our January batch of Bitmain S21 Antminers, the latest and most efficient machines on the market. These miners each have 200 terahashes per second and efficiency of 17.5 joules per terahash. To put this into perspective, this means that at current bitcoin network difficulty of 75.5 T, these machines can produce a bitcoin at a cost of approximately $10,000, assuming a power price of four cents per kilowatt-hour. Hive has purchased 7,000 of these machines, which, in total, will provide 1.4 exahashes per second of high-efficiency mining capacity to our fleet. Additionally, we note that our February batch will ship before Chinese New Year, and we anticipate receiving and installing them before the February month-end."

January, 2024, production figures

The company's total bitcoin production in January, 2024, was:

• 234.5 BTC produced from ASICs from an average hash rate of 3.88 EH/s from ASICs in January;
• 7.6 BTC produced per day on average from ASICs and 60.5 BTC/EH from ASICs in January;
• 3.85 EH/s of BTC month-end hash rate as of Jan. 31, composed of 3.85 EH/s of ASIC BTC hash rate and nil EH/s of GPU BTC hash rate;
• This represents a 4.8-per-cent month-over-month-end decrease in BTC ASIC hash rate (Dec. 31 month-end was 4.05 EH/s);
• Monthly average of 3.88 EH/s, composed of an average of 3.88 EH/s of ASIC mining capacity and average of nil petahash per second of bitcoin GPU mining capacity during the month of January;
• This is a 1.8-per-cent month-over-month decrease in BTC average hash rate from ASICs and GPUs combined (December average BTC hash rate was 3.95 EH/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 72.0 T as of Jan. 1 and decreased to 70.3 T as of Jan. 31. Accordingly, bitcoin mining difficulty ended the month about 2 per cent lower than the beginning of the month.

The bitcoin network difficulty is a publicly available statistic, which reflects the total number of bitcoin miners on-line. This is an important metric in analyzing a company's gross profit margins, along with the number of bitcoin produced. These data are publicly available on many websites.

As more bitcoin is mined (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 production during these volatile cycles. Not all miners will continuously mine during the 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.

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.

About Hive Digital Technologies Ltd.

Hive went public in 2017 as the first cryptocurrency mining company listed for trading on the TSX Venture Exchange with a sustainable green energy focus.

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 green-energy-powered data centre facilities in Canada, Sweden and Iceland, where it endeavours to source geothermal and hydroelectric 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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