SummaryHIVE's Q1 and Q2 performance show deteriorating operating efficiency and is made worse by the 80% decline in altcoin GPU mining revenue.HIVE's operating cost and depreciation increased by as high as 4x and 3x respectively since 2021Q4 while revenue is expected to decline by at least 32%.HIVE's expected all-in business cost per BTC ($65,000) is now ~2x higher all-in business cost per BTC than the industry average.We couldn't find a sufficient investment value proposition for HIVE due to mining inefficiencies, excessive risk of mining altcoins, and the premium on trading above adjusted book value.IntroductionWe've covered HIVE Blockchain's (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 turn...
