The following discussion is management's assessment and analysis of the results of operations, cash flows and financial condition of HIVE Blockchain Technologies Ltd. ("HIVE" or the "Company") on a consolidated basis for the three and nine months ended December 31, 2022, and should be read in conjunction with the accompanying unaudited condensed interim consolidated financial statements and related notes for the three and nine months ended December 31, 2022.  These documents and additional information regarding the business of the Company are available on the System for Electronic Document Analysis and Retrieval ("SEDAR") at www.sedar.com, the Electronic Data Gathering, Analysis and Retrieval ("EDGAR") system maintained by the Securities and Exchange Commission (the "SEC") at www.sec.gov/EDGAR and the Company's website at www.hiveblockchain.com.  The preparation of financial data is in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB") and all figures are reported in United States dollars unless otherwise indicated.

This Management's Discussion & Analysis contains information up to and including February 20, 2023.

BUSINESS OVERVIEW

HIVE Blockchain Technologies Ltd. is a growth-oriented company listed on the TSX Venture Exchange ("TSXV") and the NASDAQ Capital Markets Exchange ("NASDAQ").  Our primary business is mining Bitcoin.  Because the Company substantially holds the Bitcoin and monetizes (or converts into Bitcoin) other cryptocurrencies that it derives from its mining operations, we view the Company as a bridge between the Bitcoin blockchain sector and traditional capital markets.  Our cryptocurrency assets provide shareholders with exposure to the operating margins of digital currency mining as well as a portfolio of Bitcoin.

HIVE operates state-of-the-art "green" energy-powered data centre facilities in Canada, Sweden, and Iceland.  Our references to "green" energy are to our energy agreements with producers of hydroelectric power in Sweden and Canada, and hosting agreements with suppliers in Iceland where the hosting facilities are powered by hydroelectric or geothermal power.  Our facilities in each of these locations mainly produce newly minted Bitcoin continuously in the cloud.  While one of our key objectives in locating our facilities where they are is to avoid using energy derived from fossil fuels, our facilities are connected to local power grids that are controlled by local authorities.  As a result, we do not control the sourcing of our power, which may include energy from any source on the grid.  The close proximity of our facilities to hydroelectric and geothermal based power generating plants, however, makes it highly probable that most or all of the energy we use for mining is coming from those hydroelectric and geothermal plants, which is the basis for our saying that our operations are "green."

Our major data centres are: 1) A Bitcoin mining operation at a facility in New Brunswick, Canada that we own, and that is currently equipped with approximately 17,300 new generation ASIC mining rigs with an aggregate operating hash rate of approximately 1,480 PH/s, utilizing approximately 60 megawatts ("MW") of power capacity; 2) A Bitcoin mining operation at a leased facility in Quebec, Canada, that is currently equipped with approximately 7,100 new generation ASIC mining rigs with an aggregate operating hash rate of approximately 530 Peta hashes per second (PH/s), utilizing approximately 27MW of power but with available power capacity of 30MW; and 3) a leased facility in Sweden that is currently equipped with power capacity of 32MW, of which 25MW are GPUs which produce approximately 350 PH/s of Bitcoin mining capacity, 5.5MW are ASICs which produce 130 PH/s of Bitcoin mining capacity and the remainder is cooling and operations.  In northern Sweden there is an additional 4MW data center that HIVE operates which produces approximately 60 PH/s.  In Iceland HIVE has a 5MW hosted data center which produces 110 PH/s and another 5MW hosted facility which produce 101 PH/s.  All the mining power is being utilized by HIVE to generate mining rewards that are paid in Bitcoin and occasionally other crypto currencies that we convert into Bitcoin.  Generally, we retain our Bitcoin in segregated, secure storage wallets with Fireblocks Inc. ("Fireblocks"), a third-party provider that specializes in secure crypto storage.  See "DIGITAL CURRENCY AND RISK MANAGEMENT" below.  We have not pledged or staked our Bitcoin assets as collateral against debt or other obligations of any kind.  Our Bitcoin is not stored on any exchange.  Our Bitcoin is never "staked" (see definition of "Proof-of-Stake" below) or loaned to any third party.

The Company recognizes revenue from the provision of transaction verification services, known as 'cryptocurrency mining', for which the Company receives digital currencies and records them at their fair value on the date received.

Q3 Quarterly Summary - December 31, 2022

• Generated revenue of $14.3 million, with a gross mining margin¹  of $3.6 million
• Mined 787 Bitcoin during the three-month period ended December 31, 2022
• Net loss before tax of $90.4 million for the three-month period
• Decreased working capital by $21.6 million during the three-month period ended December 31, 2022
• Digital currency assets of $39.0 million, as at December 31, 2022
• Impairment on miner equipment of $38.8 million during the three-month period ended December 31, 2022
• Impairment on equipment deposits of $22.7 million during the three-month period ended December 31, 2022.

The Company is a reporting issuer in each of the Provinces and Territories of Canada and is a reporting issuer under the Securities Exchange Act of 1934 in the United States.  The Company's shares are listed for trading on the TSXV, under the symbol "HIVE.V", as well as on the NASDAQ Capital Market under "HIVE" and on the Open Market of the Frankfurt Stock Exchange under the symbol "HBFA.F".  The Company's head office is located at Suite 855, 789 West Pender Street, Vancouver, BC, V6C 1H2, and the Company's registered office is located at Suite 2500, 700 West Georgia Street, Vancouver, BC, V7Y 1B3.

DEFINED TERMS

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¹Non-IFRS measure. A reconciliation to its nearest IFRS measures is provided under "Reconciliations of Non-IFRS Financial Performance Measures" below.

OUTLOOK

Operations

In addition to our crypto-currency mining operations, the Company has continued its efforts to upgrade and expand its facilities to enable HIVE to offer High Performance Computing to companies in the gaming, artificial intelligence and graphics rendering industries.

Also, the Company has engaged in re-selling a portion of the electric power it receives from a national energy utility company in Sweden, pursuant to electric power supply agreements in place.  In light of recent hikes in energy prices in Europe and relatively low Bitcoin prices, we have found energy re-sale opportunities in some circumstances provide better returns than using the energy for mining operations.

COVID-19 and Upgrade Program

As it relates to the continuing impact from the COVID-19 virus, HIVE has enacted various measures to protect its employees and partners and prevent disruption to operations, in each case in alignment with local governments as well as national and international agency recommendations.  These policies include ceasing non-essential travel and having employees work remotely where possible.  The Company has been able to maintain normal uptime of its cryptocurrency mining operations and its data centres and its supply chain continues to operate with only minimal disruption.  The Company operates with a lean administrative structure and has few employees, as cryptocurrency mining is not a human capital-intensive industry.  The Company's data centres are located in sparsely populated areas near the Arctic Circle in Europe, in rural Quebec and in New Brunswick near the border of Maine.  Most management operations can be accomplished remotely, and any necessary equipment maintenance can be achieved by minimal staff utilizing personal protective equipment and maintaining physical distancing.  The Company continues to caution that current global uncertainty with respect to the spread of the COVID-19 virus and emerging variants and its effect on the broader global economy may have a significant negative effect on the Company.  While the precise impact of the COVID-19 virus on the Company remains unknown, the rapid spread of the COVID-19 virus and its variants may have a material adverse effect on global economic activity and can result in volatility and disruption to global supply chains, operations, mobility of people and the financial markets, which could affect interest rates, credit ratings, credit risk, inflation, business, financial conditions, results of operations and other factors relevant to the Company.

The Russian Invasion of Ukraine

On February 24, 2022, Russia invaded Ukraine.  In Europe, natural gas is a primary source of energy for homes and industry.  Prior to the war, in 2020, Russia accounted for around 29% of crude oil and 43% of natural gas imports into the EU.  Following the invasion, energy prices in Sweden surged to record levels.  While it is impossible to predict what affect the war in Ukraine could have on the Company's operations in Sweden, our energy pricing is currently buffered partially by the ability to enter into forward energy agreements for the purchase of electricity.  These energy hedging contracts allow HIVE to have a contract to purchase a fixed quantity of power (MW), for a fixed period of time (number of months); this means, if the index spot price increases, HIVE can rely on a previously agreed upon fixed energy price to operate its digital asset mining operations. Furthermore HIVE monitors the hashrate economics of its operations to distill our earnings in dollars per megawatt hour (MWHR) from digital asset mining. In the event that it may be more profitable for HIVE to sell back to the grid (since HIVE receives the proceeds of energy sold at index spot pricing, with the cost being the fixed price from the energy hedged contract), HIVE may elect to do so in favour of mining digital assets. Our Swedish operation utilizes approximately 37.5MW of renewable hydroelectric energy, which represents approximately 25% of our global overall utilization of hydroelectric and geothermal energy.

Ethereum Mining Industry Revenues of U.S. dollars per Day for each 1 Megahash per second of computing power;

August 1, 2021 - September 15, 2022

Source: bitinfocharts.com

• Ethereum mining with proof of work consensus ceased as of September 15, 2022, when the "Merge" took place and Ethereum shifted to proof of stake consensus and consequently, revenues from Ethereum minng have no longer been available. Leading up to this date, Ethereum mining economics were consistent between the $0.02 per Megahash per day to $0.03 cents per Megahash per day range. Since then our GPU based machines have been repurposed to use a unique algorithm to optimize profitability in mining altcoins, with our mining fees paid in Bitcoin. After the Ethereum Merge, the Company's fleet of GPU based machines had been producing an equivalent of 350 PH/s to 400 PH/s Bitcoin mining capacity.  This is in addition to the Bitcoin mining capacity from HIVE's ASIC fleet.  Therefore approximately 25 megawatts of HIVE's GPU based operating capacity had been receiving payout in Bitcoin.

• Using the optimization algorithm, HIVE is able to more profitably mine an assortment of coins with its GPU fleet, than if it was only mining a single coin (such as Ethereum Classic).  The assortment of coins which HIVE mines using its GPU fleet varies over time and is chosen on the basis of profit optimization.  As a consequence of the Company's technical advancements, we believe HIVE has a competitive edge in generating revenue from GPU machine based operations. As of February 2023, HIVE's fleet of Nvidia GPU cards are generating approximately $80/MWHR using a profit switching algorithm, mining the most profitable alt-coin, from which HIVE is then paid in Bitcoin.

Bitcoin Mining Industry Revenues of U.S. dollars per Day for each 1 Terahash per second of computing power:

October 2021 - February 2023

Source: bitinfocharts.com

• Bitcoin mining economics saw a downturn in profitability during this quarter, with the volatility of Bitcoin price as low as $16,500 and the Bitcoin mining hash price as low as $0.05 per TH/s per day, however, the break-even operating cost for miners depends on the electricity price as well as machine efficiencies, which have seen improvements with newer generation mining machines.  For example, at current Difficulty of 36.9T seen in November 2022 and a Bitcoin price of $16,500, an ASIC miner that has an efficiency of 30 Joules per Terahash can be expected to generate mining revenues of approximately $0.08 per kWh approximately, establishing the breakeven operating cost.  Under the same Difficulty and Bitcoin price, a miner that contains an ASIC with an efficiency of 40 Joules per Terahash can be expected to generate revenues of approximately $0.06 per kWh.  Therefore, as long as the operating costs of a miner in this example are below $0.06 per kWh, establishing the breakeven operating cost of those machines.  When there is enough downward pressure on profitability, it is generally the case that miners with higher electricity or operating costs and/or miners operating machines with lower efficiency with a higher breakeven price, will be not be able to operate profitably, and these miners may pause their operations, causing the network hash rate and the difficulty to decrease.

• We did see that Bitcoin mining economics realized a floor value in November 2022 at $0.05 per TH/s per day.  This was reflected in difficulty dropping from 36.9T to 34.2T, in December 2022.  This allowed mining economics to slight recover, and since then we’ve since the mining economics recover to about $0.08 per TH/s per day, as the Bitcoin price has rallied to above $20,000 USD, although difficulty has increased along with this.  Accordingly, as of today a 30 J/TH ASIC miner would generate $0.10 per KWHR revenue, and a 40 J/TH ASIC miner would produce about $0.075 per KWHR revenue. Accordingly, the Company notes that the GPU fleet currently mining at $80/MWHR, or $0.08 per KWHR is very competitive.

Industry subject to evolving regulatory and tax landscape

Both the regulatory and tax landscape for digital companies is evolving.  The changing regulatory landscape applies to sectors that are based on blockchain, distributed ledgers, technology and the mining, use, sale and holding of tokens, or digital currencies, and the blockchain technology networks that support them.

Operating in an emerging industry, the Company must adapt to significant changes in regulatory, tax and industry rules and guidelines and obtain regulatory and tax advice from external global experts.  In addition, regulations and the rules, rates, interpretations, and practices related to taxes, including consumption taxes such as value added taxes (VAT), are constantly changing.

The Company's headquarters are in Vancouver, British Columbia, Canada and as such the Company is subject to the jurisdiction of the laws of the Province of British Columbia and the federal laws of Canada.  The Company intends to manage its data centres and trading operations from Bermuda in order to simplify tax expectations and extend its eligible trading window for its cryptocurrencies, as Bermuda is under the Atlantic Standard Time zone.

However, the Company also has assets in a variety of other countries and is subject to changes in political conditions and regulations within these markets.  Changes, if any, in policies or shifts in political attitude could adversely affect the Company's operations or profitability.  See "The Russian Invasion of Ukraine" above.

Operations may be affected in varying degrees by government regulations and decisions with respect to, but not limited to, restrictions on price controls, currency remittance, income and consumption taxes, foreign investment, maintenance of claims, environmental legislation, land use, electricity use and safety. Additionally, cryptocurrency prices are highly volatile, can fluctuate substantially and are affected by numerous factors beyond the Company's control, including hacking, demand, inflation, and expectations with respect to the rate of inflation, global or regional political or economic events.

On-going and future regulatory or tax changes, actions or decisions may alter the nature of an investment in the Company or restrict the use of cryptocurrencies in a manner that adversely affects the Company's operations.  The effect of any future regulatory change on the Company or any cryptocurrency that the Company may mine is impossible to predict, but such change could be substantial and adverse to the Company.

For example, governments may in the future curtail or outlaw the acquisition, use or redemption of cryptocurrencies.  Governments may also take regulatory action that may increase the cost and/or subject cryptocurrency companies to additional regulation or prohibit or severely restrict the right to acquire, own, hold, sell, use or trade cryptocurrencies or to exchange cryptocurrencies for fiat currency.  By extension, similar actions by other governments, may result in the restriction of the acquisition, ownership, holding, selling, use or trading in the Company's common shares.  Such a restriction could result in the Company liquidating its cryptocurrency inventory at unfavorable prices and may adversely affect the Company's shareholders.

The Company believes the present attitude to blockchain technology, and the digital currency mining industry is increasingly favourable in many countries, but conditions may change.  Operations may be affected in varying degrees by government regulation with respect to restrictions on production, price controls, export controls, foreign exchange controls, income and other taxes, and environmental legislation.

The Company's wholly owned subsidiaries located in Sweden (Bikupa Datacenter AB ("Bikupa") and Bikupa Datacenter 2 AB ("Bikupa 2") received decision notice of assessments ("the decision(s)"), on December 28, 2022 and February 14, 2023 for Bikupa and Bikupa 2 respectively, from the Swedish Tax Authority in connection with the application of VAT and its ability to recover input VAT against certain equipment and other charges in a total amount of SEK 337.9 million or approximately $32.4 million.  The assessments covered the period December 2020 to June 2022 for Bikupa, and the period April 2021 to June 2022 for Bikupa 2, expressing the intent to reject the recovery of all the VAT for the periods under assessment.

The Company has filed a formal appeal in connection with the Bikupa decision on February 9, 2023; however, there can be no guarantee that the Company will achieve a favourable outcome in its appeal.  A formal appeal for Bikupa 2 in relation to the February 14, 2023, decision is pending by the Company.  The Company has engaged an independent legal firm in Sweden that has expertise in these matters to assist in the appeal process.  The Company does not believe that the decision has merit because in our opinion and those of our independent advisors, the decision is not compatible with the current applicable law and therefore the amount claimed to be owed by the Company is not probable.  According to general principles regarding the placement of the burden of proof, it is up to the Swedish Tax Agency to provide sufficient evidence in support of its decision.  In our opinion, the Swedish Tax Agency has not substantiated their claim.  We are not aware of any precedent cases, authoritative literature, or other statement that supports the Swedish Tax Agency's position.

It is not yet known when this dispute will be resolved; the due process following appeals and the court ruling could extend beyond a year.  Furthermore, given that the industry is rapidly developing, there can be no guarantee that changes to the laws or policies of Sweden will not have a negative impact on the Company's tax position with respect to the eligibility of the claimed VAT.

If the Company is unsuccessful in its appeal, the full amount could be payable including other items such as penalties and interest that may continue to accrue to the Company. The Company will continue to assess these matters.

INTEL SUPPLY AGREEMENT

On March 7, 2022, the Company entered into a Supply Agreement with Intel Corporation for the purchase of its new generation of application specific integrated circuits ("ASICs") designed specifically for processing SHA-256 cryptographic hash functions and associated software, known as Intel's "Blockscale".

The Company has also entered into a manufacturing agreement with an original design manufacturer ("ODM") that has expertise in electronics manufacturing and experience manufacturing integrated systems for Intel.  The ODM will integrate Intel's Blockscale ASICs into an air-cooled Bitcoin mining system.  The Company's engineering team will draw on its expertise in hardware and software implementation and will work closely with Intel and the ODM partner on the systems integration.  These miners are expected to be delivered over a period of one year starting in the second half of calendar year 2022, the effect of which, when installed, would be an expected increase of over 1 Exahash per second of Bitcoin mining hashrate.  This target reflects a revised hashrate from previous estimates, as the Company has adjusted capital allocation targets for the interim period, focusing on near term growth.

GPU ATLANTIC ACQUISITION

On April 15, 2021, the Company completed the acquisition of 100% of the common shares of GPU Atlantic.  In consideration for 100% of GPU Atlantic, the Company paid total consideration of 1,000,000 common shares on closing valued at a total of $18.6 million (C$23.7 million).  200,000 of the common shares were allocated to a holdback subject to an earn-out payable upon meeting certain earn-out conditions.  All 200,000 common shares allocated to the holdback were issued as March 31, 2022.

GPU Atlantic has a 50-megawatt data centre campus located in New Brunswick, Canada.

As part of the transaction, the Company also acquired a $10,978,065 (C$13,639,249) term loan included in the long-term debt acquired.

* Intangible assets represent an internally generated mining monitoring, tracking and generating software.

** Goodwill represents expected synergies, future income growth potential, and other intangibles that do not qualify for separate recognition.  None of the goodwill arising on the acquisition is expected to be deductible for tax purposes. At the year ended March 31, 2022, the goodwill was fully impaired.

The purchase price allocation for acquisitions reflects various fair value estimates which are subject to change within the measurement period.  The primary areas of purchase price allocation that are subject to change relate to the fair values of certain tangible assets, the valuation of identifiable intangible assets acquired, and residual goodwill.  Measurement period adjustments that the Company determines to be material will be applied retrospectively to the period of acquisition in the Company's consolidated financial statements and, depending on the nature of the adjustments, other periods after the period of acquisition could also be affected.

INVESTMENT IN VALOUR

On April 21, 2021, the Company completed a share swap transaction with Valour Inc. ("Valour") (formerly DeFi Technologies Inc.), pursuant to which HIVE received 10,000,000 common shares of Valour, in exchange for 800,000 common shares of the Company, valued at C$16.0 million.

CONVERTIBLE DEBENTURE

On January 12, 2021, the Company closed its non-brokered private placement of unsecured debentures (the "Debentures"), for aggregate gross proceeds of $15,000,000 with U.S. Global Investors, Inc. ("U.S. Global").  The Executive Chairman of the Company is a director, officer and controlling shareholder of U.S. Global, but the transaction was exempt from the formal valuation and minority approval requirements in Multilateral Instrument 61-10 Protection of Minority Holders in Special Transactions, because the fair market value of the transaction did not exceed 25% of the Company's market capitalization.

The Debentures will mature on the date that is 60 months from the date of issuance, bearing interest at a rate of 8% per annum.  The Debentures were issued at par, with each Debenture being redeemable by HIVE at any time, and convertible at the option of the holder into common shares (each, a "Share") in the capital of the Company at a conversion price of C$15.00 per Share.  Interest is payable monthly, and principal is payable quarterly.  In addition, U.S. Global was issued 5 million common share purchase warrants (the "January 2021 Warrants").  Each five whole January 2021 Warrants entitles U.S. Global to acquire one common Share at an exercise price of C$15.00 per Share for a period of three years from closing.  The Company has been paying down this debt on a quarterly basis and the total debt as of period ended December 31, 2022 is $9.1 million.

AT-THE-MARKET EQUITY PROGRAM

On February 2, 2021, the Company entered into an equity distribution agreement ("Equity Distribution Agreement") with Canaccord Genuity Corp.  Under the Equity Distribution Agreement, the Company was provided the option to sell up to US$100 million of common shares in the capital of the Company at their discretion (the "ATM Equity Program").  The termination of the ATM Equity Program was effective as of March 8, 2022.

For the year ended March 31, 2022, the Company issued 2,174,500 common shares (the "ATM Shares") pursuant to the ATM Equity Program for proceeds of C$43,588,175 ($34,956,134).  The ATM Shares were sold at prevailing market prices, for an average price per ATM Share of C$19.44.  Pursuant to the Equity Distribution Agreement, a cash commission of $1,048,683 on the aggregate gross proceeds raised was paid to the agent in connection with its services under the Equity Distribution Agreement.

The Company used the net proceeds from the Equity Distribution Agreement for the purchase of data centre equipment, strategic investments especially in building our BTC assets on our balance sheet and ended the year ended March 31, 2022, with 2,596 BTC, and general working capital.  The Equity Distribution Agreement was terminated as of March 8, 2022.

On September 2, 2022, the Company entered into an equity distribution agreement ("2022 Equity Distribution Agreement") with H.C. Wainwright & Co., LLC.  Under the 2022 Equity Distribution Agreement, the Company was provided the option to sell up to US$100 million of common shares in the capital of the Company at their discretion (the "2022 ATM Equity Program").  The 2022 Equity Distribution Agreement was terminated as of February 6, 2023.

For the period ended December 31, 2022, the Company issued 1,306,474 common shares (the "2022 ATM Shares") pursuant to the 2022 ATM Equity Program for gross proceeds of $3,941,736.  The 2022 ATM Shares were sold at prevailing market prices, for an average price per ATM Share of C$4.01.  Pursuant to the 2022 Equity Distribution Agreement, a cash commission of $119,983 on the aggregate gross proceeds raised was paid to the agent in connection with its services under the 2022 Equity Distribution Agreement.

The Company is using the net proceeds from the 2022 Equity Distribution Agreement for the purchase of data centre equipment, strategic investments especially in building BTC assets on our balance sheet and ended the December 31, 2022, period with 2,372 BTC, and general working capital.

BOUGHT-DEAL PRIVATE PLACEMENT

On November 30, 2021, the Company completed an agreement with Stifel GMP as lead underwriter and sole bookrunner to include a syndicate of underwriters (the "Underwriters"), whereby the Underwriters agreed to purchase, on a bought-deal basis, 3,834,100 special warrants of the Company (the "Special Warrants") at a price of C$30.00 per Special Warrant for aggregate gross proceeds to the Company of C$115,023,000 (the "Offering").

On January 11, 2022, each Special Warrant was deemed to be converted into one unit, with each unit comprised of one common share of the Company and one-half of one common share purchase warrant (each whole common share purchase warrant being a "January 2022 Warrant").  Each January 2022 Warrant is exercisable for one share on or before May 30, 2024, at an exercise price of C$30.00 per Share.  The funds were used to expand our BTC production and data center build-out.

BOREALIS HOSTING AGREEMENT

On November 25th, 2021, HIVE Blockchain Iceland ehf entered into a service agreement with Borealis Data Park ehf, for the hosting of equipment in Iceland.  The agreement enables the hosting of approximately 1,200 new generation Bitcoin miners, or 4.5MW of capacity, over a period of 36 months, using green (hydroelectric and geothermal based) energy.  The completion of the Borealis facility, and subsequent installation of HIVE ASIC miners, resulted in the hashrate coming online in March 2022.

SHARE CONSOLIDATION

On May 24, 2022, the Company underwent a consolidation of the Common Shares (the "Consolidation") on the basis of five pre-consolidation Common Shares for one post-consolidation Common Share.  Unless otherwise stated, all references to Common Shares in this MD&A are to post-Consolidation Common Shares.

CONSOLIDATED RESULTS OF OPERATIONS

Below is an analysis of the Company's revenue and gross mining margin:

(1) Non-IFRS measure. A reconciliation to its nearest IFRS measures is provided under "Reconciliations of Non-IFRS Financial Performance Measures" below.

(2) Revaluation is calculated as the change in value (gain or loss) on the coin inventory.  When coins are sold, the net difference between the proceeds and the carrying value of the digital currency (including the revaluation), is recorded as a gain (loss) on the sale of digital currencies.

Revenue

For the nine-month period ended December 31, 2022, revenue was $88.1 million, a decrease of approximately 44% from the prior period.  The decrease was primarily due to a decrease in cryptocurrency prices during the current period compared to the prior period.

Gross Mining Margin and Gross Mining Margin %

For the nine-month period ended December 31, 2022, HIVE's gross mining margin percentage was 53% compared to 87% for the prior period.

The Company's gross mining margin from digital currency mining is partially dependent on various external network factors including mining difficulty, the amount of digital currency rewards and fees it receives for mining, and the market price of the digital currencies at the time of mining. 

The average monthly Bitcoin market data from April 2022 to December 2022 was as follows:

Sources: Coinmarketcap.com, Glassnode.com, Blockchain.com

The average monthly Bitcoin market data from April 2021 to March 2022 was as follows:

Sources: Coinmarketcap.com, Glassnode.com, Blockchain.com

For reference, the following chart shows Bitcoin price vs Bitcoin miners' revenues (in Bitcoin block rewards and transaction fees) vs block difficulty* for the 24-month period from January 2021 to December 2022:

Source: Glassnode.com

* Block Difficulty - A relative measure of how difficult it is to find a new block. The difficulty is adjusted periodically as a function of how much hashing power has been deployed by the network of miners.

The block reward is how new bitcoin is "minted" or brought into the economy. These rewards, which started at 50 Bitcoin at inception of the network in 2009, halve every 210,000 blocks, with the halving that occurred on May 11, 2020, resulting in a reward of 6.25 Bitcoin per block vs 12.5 immediately prior to the halving.  The next halving which will reduce the reward to 3.125 Bitcoin per block is currently projected to happen in April or May 2024.

After the Spring 2024 halving event, the total number of bitcoins available to miners per day will fall from approximately 900 per day to 450. HIVE is preparing for this by upgrading and expanding our fleet of miners. The company recently purchased high performance 3,570 Bitmain S19j Pro mining rigs at steeply discounted prices to increase the efficiency of our global fleet.

Total Assets

Total assets decreased to $189.4 million as at December 31, 2022 from $452.3 million at March 31, 2022, primarily due to the decrease in the value of our digital currencies by $131.0 million, the decrease in the value of our investments by $11.5 million, the decrease in long-term deposits by $43.8 million which includes impairments of $27.3 million on equipment deposits, a decrease in a right of use assets by $1.4 million, and the decrease in plant and equipment by $83.9 million which includes impairments of $71.4 million, offset by an increase in cash by $3.3 million, an increase in amounts receivable and prepaids by $4.0 million, and an increase in long term receivables by $1.6 million.

The significant assets consisted of cash of $8.6 million, amounts receivable and prepaids of $10.8 million, investments of $5.5 million, digital currencies of $39.0 million, data centre equipment of $93.7 million, long-term receivable of $4.7 million, long term deposits of $15.9 million, and right of use assets of $11.2 million.

Total Liabilities

Total liabilities decreased to $48.5 million as at December 31, 2022 from $63.2 million as of March 31, 2022, primarily due to the decrease in accounts payable and accrued liabilities by $2.8 million, decrease in convertible loans by $5.5 million, decrease in term loan payable by $1.8 million, decrease in loans payable by $1.5 million, decrease in lease liability by $2.4 million, decrease in deferred tax liability of $1.5 million offset by the increase in income tax liability by $0.9 million.

RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED DECEMBER 31, 2022

During the three-month period ended December 31, 2022, the Company recorded net loss before tax of $90.4 million (Q3 F2022 - net income of $51.2 million).

Revenue:

• Revenue of $14.3 million, including the mining of 787 Bitcoin.

Operating expenses:

• Operating and maintenance costs were $10.7 million consisting of fees paid to suppliers including local electricity providers, as well as service provider Blockbase Consulting GmbH ("Blockbase"), and includes electricity, daily monitoring and maintenance and all other costs directly related to the maintenance and operation of the data centre equipment; and
• Depreciation for the quarter of $20.3 million related to the Company's data centre equipment and right of use assets.

Gain on sale of digital currencies:

• The Company sold digital currencies and received proceeds of $30.9 million during the three-month period ended December 31, 2022; the Company recognized a loss on sale of $3.4 million in relation to the sale of digital currencies with a cost base of $34.3 million.

Revaluation of digital currencies:

• The Company recorded a loss of $6.0 million related to the quarterly revaluation of its portfolio of digital currencies.

Other items:

• Share based compensation expense of $2.6 million in relation to the options and restricted share units vested in the period;
• Foreign exchange gain of $2.0 million;
• General and administrative expense of $3.2 million;
• Unrealized loss on investments of $1.1 million;
• Change in fair value of derivative liability of $0.7 million;
• Impairment of mining equipment of $38.8 million;
• Impairment of equipment deposits of $22.7 million;
• Loss on sale of mining equipment of $1.3 million;
• Other income of $0.2 million; and
• Finance expense of $1.0 million.
  
  

RESULTS OF OPERATIONS FOR THE NINE MONTHS ENDED DECEMBER 31, 2022

During the nine-month period ended December 31, 2022, the Company recorded net loss before tax of $222.9 million (F2022 -net income of $113.6 million).

Revenue:

• Revenue of $88.1 million, including the mining of 2,466 Bitcoin.

Operating expenses:

• Operating and maintenance costs were $41.5 million consisting of fees paid to suppliers including local electricity providers, as well as service provider Blockbase Consulting GmbH ("Blockbase"), and includes electricity, daily monitoring and maintenance and all other costs directly related to the maintenance and operation of the data centre equipment; and
• Depreciation for the quarter of $70.4 million related to the Company's data centre equipment and right of use assets.

Gain on sale of digital currencies:

• The Company sold digital currencies and received proceeds of $102.7 million during the nine-month period ended December 31, 2022; the Company recognized a loss on sale of $22.2 million in relation to the sale of digital currencies with a cost base of $124.9 million.

Revaluation of digital currencies:

• The Company recorded a loss of $80.5 million related to the quarterly revaluation of its portfolio of digital currencies.

Other items:

• Share based compensation expense of $5.5 million in relation to the options and restricted share units vested in the period;
• Foreign exchange gain of $5.5 million;
• General and administrative expense of $9.9 million;
• Unrealized loss on investments of $10.8 million;
• Change in fair value of derivative liability of $4.9 million;
• Impairment of miner equipment of $71.4 million;
• Impairment of equipment deposits of $27.3 million;
• Loss on sale of mining equipment of $1.3 million;
• Other income of $0.2 million; and
• Finance expense of $2.9 million.

RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED DECEMBER 31, 2021

During the three-month period ended December 31, 2021, the Company recorded net income before tax of $51.2 million (Q3 F2021 - $17.2 million).

Revenue:

• Revenue of $68.2 million from the mining of digital currencies, including 7,126 Ethereum and 697 Bitcoin; and
• Hosting revenue of $0.7 million earned from the hosting of ASIC miners for clients.

Operating expenses:

• Operating and maintenance costs were $6.5 million consisting of fees paid to suppliers including local electricity providers, as well as service provider Blockbase, and includes electricity, daily monitoring and maintenance and all other costs directly related to the maintenance and operation of the data centre equipment; and
• Depreciation for the quarter of $15.0 million related to the Company's data centre equipment and right of use assets.

Revaluation of digital currencies:

• The Company recorded a loss of $1.1 million related to the quarterly revaluation of its portfolio of digital currencies.

Other items:

• Share based compensation expense of $1.7 million in relation to the options and restricted share units vested in the period;
• General and administrative expense of $2.9 million;
• Foreign exchange loss of $1.7 million;
• Unrealized gain on investments of $11.9 million;
• Change in fair value of derivative liability of $0.6 million;
• Change in fair value of escrow share liability of $0.04 million; and
• Finance expense of $1.3 million.

RESULTS OF OPERATIONS FOR THE NINE MONTHS ENDED DECEMBER 31, 2021

During the nine-month period ended December 31, 2021, the Company recorded net income before tax of $113.6 million (F2021 - $28.5 million).

Revenue:

• Revenue of $158.0 million from the mining of digital currencies, including 25,516 Ethereum and 1,573 Bitcoin; and
• Hosting revenue of $3.4 million earned from the hosting of ASIC miners for clients.

Operating expenses:

• Operating and maintenance costs were $20.3 million consisting of fees paid to suppliers including local electricity providers, as well as service provider Blockbase, and includes electricity, daily monitoring and maintenance and all other costs directly related to the maintenance and operation of the data centre equipment; and
• Depreciation for the quarter of $31.5 million related to the Company's data centre equipment and right of use assets.

Other items:

• Share based compensation expense of $5.5 million in relation to the options and restricted share units vested in the period;
• General and administrative expense of $6.6 million;
• Foreign exchange loss of $3.0 million;
• Unrealized gain on investments of $12.2 million;
• Change in fair value of derivative liability of $6.9 million;
• Change in fair value of escrow share liability of $1.0 million;
• Gain on sale of subsidiary of $3.2 million; and
• Finance expense of $3.1 million.

SUMMARY OF QUARTERLY RESULTS

The following tables summarize the Company's financial information for the last eight quarters in accordance with IFRS:

LIQUIDITY AND CAPITAL RESOURCES

The Company commenced earning revenue from digital currency mining in mid-September 2017.  The Company is reliant on external financing to take advantage of growth opportunities while preserving its crypto currency assets.  The Company's ability to continue as a going concern is dependent on the Company's ability to efficiently mine and liquidate digital currencies.

As at December 31, 2022, the Company had a working capital balance of $41.5 million (March 31, 2022 - $174.1 million) and currently has sufficient cash to fund its current operating and administrative costs.

The net change in the Company's cash position as at December 31, 2022 as compared to March 31, 2022 was an increase of $3.3 million as a result of the following cash flows:

• Cash provided by operating activities of $46.8 million;
• Cash used in investing activities of $40.8 million related to the purchase of mining equipment, and deposits on mining equipment; and
• Cash used in financing activities of $2.6 million for lease and debt payments.

At December 31, 2022 and at the date of this report, the following securities were outstanding:

RECONCILIATIONS OF NON-IFRS FINANCIAL PERFORMANCE MEASURES

The Company has presented certain non-IFRS measures in this document.  The Company believes that these measures, while not a substitute for measures of performance prepared in accordance with IFRS, provide investors an improved ability to evaluate the underlying performance of the Company.  These measures do not have any standardized meaning prescribed under IFRS, and therefore may not be comparable to other issuers.

Gross Mining Margin

The Company believes that, in addition to conventional measures prepared in accordance with IFRS, it is helpful to investors to use the gross mining margin to evaluate the Company's performance and ability to generate cash flows and service debt.  The Gross mining margin is defined as revenue less direct cash costs, being operating and maintenance costs.  Accordingly, this measure does not have a standard meaning and is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS.

The following table provides illustration of the calculation of the gross mining margin for the last five quarters:

(1) As presented on the statements of income (loss) and comprehensive income (loss).

EBITDA & Adjusted EBITDA

The Company uses EBITDA and Adjusted EBITDA as a metric that is useful for assessing its operating performance on a cash basis before the impact of non-cash items and acquisition related activities.

EBITDA is net income or loss from operations, as reported in profit and loss, before finance income and expense, tax and depreciation and amortization.

Adjusted EBITDA is EBITDA adjusted for removing other non-cash items, including share-based compensation, non-cash effect of the revaluation of digital currencies and one-time transactions.

The following table provides illustration of the calculation of EBITDA and Adjusted EBITDA for the last five quarters:

 (1) As presented on the statements of income (loss) and comprehensive income (loss).

The Company had the following related party transactions not otherwise disclosed in these consolidated financial statements:

(a) As at December 31, 2022, the Company had $7,143 (March 31, 2022 - $22,275) due to directors and officers for the reimbursement of expenses included in accounts payable and accrued liabilities.

(b) For the three and nine months ended December 31, 2022, the Company paid $73,693 and $251, 661, respectively (2021 - $115,272 and $175,272, respectively), to a company controlled by a director of the Company for marketing services.

Key Management Compensation

Key management personnel include those persons having authority and responsibility for planning, directing and controlling the activities of the Company as a whole.  The Company has determined that key management personnel consist of members of the Company's Board of Directors and corporate officers.

For the three and nine months ended December 31, 2022, key management compensation includes salaries and wages, and consulting fees paid to key management personnel and directors of $489,127 and $1,183,328, respectively (2021 - $199,971 and $471,757, respectively), and share-based payments of $2,076,454 and $3,309,434, respectively (2021 - $544,539 and $2,827,181, respectively).

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The Company has prepared the consolidated financial statements in accordance with IFRS.  Significant accounting policies are described in Note 2 of the Company's financial statements as at and for the year ended March 31, 2022.

The preparation of financial statements in conformity with IFRS requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period.  Actual outcomes could differ from these estimates.

The Company's significant judgements are detailed in Note 3 to the condensed interim consolidated financial statements for the period ended December 31, 2022, and include: functional currency, classification of digital currencies as current assets, asset acquisitions, and revenue from digital currency mining.

FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT

The Company is exposed, in varying degrees, to a variety of financial related risks. The fair value of the Company's financial instruments, including cash, amounts receivable and accounts payable and accrued liabilities approximates their carrying value due to their short-term nature.  The type of risk exposure and the way in which such exposure is managed is provided in Note 21 to the condensed interim consolidated financial statements for the period ended December 31, 2022.

DIGITAL CURRENCY AND RISK MANAGEMENT

Digital currencies are measured using level two fair values, determined by taking the rate from quoted price from the exchanges which the Company most frequently uses, with no adjustment.

Digital currency prices are affected by various forces including global supply and demand, interest rates, exchange rates, inflation or deflation and the global political and economic conditions.  The profitability of the Company is directly related to the current and future market price of coins; in addition, the Company may not be able liquidate its inventory of digital currency at its desired price if required.  A decline in the market prices for coins could negatively impact the Company's future operations.  The Company has not hedged the conversion of any of its coin sales or future mining of digital currencies.

Digital currencies have a limited history and their fair value historically has been very volatile.  Historical performance of digital currencies is not indicative of their future price performance.  The Company's digital currencies currently consist of Bitcoin, and Ethereum Classic.  The table below shows the impact for every 5% variance in the price of each of these digital currencies on the Company's earnings before tax, based on their closing prices as at December 31, 2022.

RISKS AND UNCERTAINTIES

The Company faces several risks that are related to both the general cryptocurrency business as well as the Company's business model.  The risk factors described below summarize and supplement the risk factors contained in the Company's continuous disclosure filings including its annual information form for the year ended March 31, 2022, and this MD&A, all of which are available on SEDAR at www.sedar.com and on the SEC's EDGAR system at www.SEC.gov/EDGAR, and should be read in conjunction with the more detailed risk factors outlined therein.

The Company is exposed to risk related to the volatility/momentum pricing of any underlying digital currency mined by the Company and held in inventory.  Wide fluctuations in price, speculation, negative media coverage (highlighting for example, financial scandals related to crypto exchanges, regulatory actions and lawsuits against industry participants) and downward pricing may adversely affect investor confidence, and ultimately, the value of the Company's digital currency inventory which may have a material adverse affect on the Company, including an adverse effect on the Company's profitability from current operations.  The Company currently holds Bitcoin.  Other coins that we mine using our GPU-based systems yield mining rewards in those crypto currencies, however, those coins are regularly exchanged for Bitcoin.  As a result, the Company is more exposed to volatility in the Bitcoin market as well as the market of other smaller Proof-of-Work minable digital assets.

The Company may also be exposed to volatility in the cryptocurrency industry generally, including in sectors of the crypto industry that do not directly apply to the Company's mining business but that are integral to the cryptocurrency industry as a whole.  Negative developments in any aspect of the crypto industry, including trading platforms, individual coins and exposure of scams, appear to affect the market perception of the industry as a whole.  As a result, the value of our stock and our Bitcoin assets may be subject to greater volatility stemming from industry developments not directly related to our mining business.

The Company is also at risk due to the volatility of network hashrates (and lag between network hashrate and underlying cryptocurrency pricing), which may have an adverse effect on the Company's costs of mining.

The Company is also at risk due to volatility in energy (electricity) pricing, a key factor in the Company's profitability of its mining operations, which is subject to, among other things, government regulation and natural occurrences (including weather) which affect pricing.  The availability and pricing of energy may be negatively affected by governmental or regulatory changes in energy policies in the countries and Provinces where we operate.  In addition, the Company is exposed to being negatively impacted by changes in tax policy, such as, but not limited to, being precluded from claiming back input taxes or other specific taxes imposed on cryptocurrency mining, as well as risks of losing any existing energy rebates or tax rebates across all jurisdictions.

In particular, the Russia invasion Ukraine which began on February 24, 2022, is dramatically tightening the supply of oil and natural gas in Europe.  Natural gas is a primary source of energy for homes and industry in Europe.  Prior to the war, in 2020, Russia accounted for around 29% of crude oil and 43% of natural gas imports into the EU.  Following the invasion, energy prices in Sweden surged to record levels.  While it is impossible to predict what affect the war in Ukraine could have on the Company's operations in Sweden, our energy pricing is currently buffered partially by the ability to enter into forward energy agreements for the purchase of electricity.  Our Swedish operation utilizes approximately 37.5MW of renewable hydroelectric energy, which represents approximately 25% of our global overall utilization of hydroelectric and geothermal energy.

As a measure of security against hackers, the Company holds its Bitcoin in segregated, secure storage wallets, maintained by Fireblocks, a leading provider of crypto asset secure storage and management, which specializes in securely storing crypto currencies. HIVE has not pledged or staked our Bitcoin assets as collateral against debt or other obligations of any kind. HIVE's Bitcoin is not stored on any exchange. HIVE's Bitcoin is never "staked" (See our definition of "Proof of Stake" below) or loaned to any third party.

Notwithstanding our proactive arrangements to protect our Bitcoin from hackers, there is no guarantee that our security measures will be effective.  The Company may not be able to access or liquidate its digital currency inventory at economic values, or, if one or more such storage solutions failed or was compromised, at all.  In addition, due to the newness of the cryptocurrency industry and the regulatory environment in which conventional financial service providers operate, the Company may have restricted access to services available to more mainstream businesses (for example, banking services).  The general acceptance and use of digital currencies may never gain widespread or significant acceptance in the broader financial services industry, which may materially adversely affect the value of the Company's digital currency inventory and long-term prospects.

The Company was negatively impacted by the Merge on September 15, 2022, when Ethereum shifted from a "proof-of-work" mining protocol to a "proof-of-stake" blockchain.  Since that date, the Company has ceased mining Ethereum and has liquidated its Ethereum holdings.  While it appears unlikely that the Bitcoin blockchain, which is central to our business, could be modified in a fashion similar to the Merge, there is no assurance that subsequent technology or innovations will not negatively affect the Bitcoin blockchain or the profitability of mining Bitcoin.

The Company also faces risk relating to the impact of the timing and exchange rate fluctuations resulting from the remittance and receipt back of value added taxes where applicable, as well as risks related to the imposition and quantum of value added taxes in jurisdictions where the Company operates.  Due to the newness of the industry, there exists the possibility that the tax treatment of digital currencies becomes less favourable, which could have a material adverse effect on the Company.

The Company may be required to sell its digital currency inventory (principally Bitcoin) in order to pay for its ongoing expenses.  In particular, such expenses could include contractual obligations for equipment purchases and the cost of maintaining the Company's facilities.  Such sales of our crypto currency assets may not be available at economic values.  The sale of our digital currency assets to pay expenses may reduce the attractiveness of the Company as an investment, which would negatively impact our share price.

Given the novelty of digital currency mining and associated businesses, insurance covering crypto assets is generally not available, or uneconomical for the Company to obtain.  As a result, we may have inadequate insurance coverage.  While the Company takes measures to mitigate against losses of physical equipment, facility damage and mined digital currency held in inventory, our insurance may be inadequate to cover such losses, especially the loss of digital currency.  In particular, we may be unduly exposed to loss as a result of cybercrime (hacking).

In terms of regulatory risks, governments may take action in the future that prohibit or restrict the right to acquire, own, hold, sell, use, mine or trade digital currencies or exchange digital currencies for fiat currency.  Such restrictions, while impossible to predict, could result in the Company liquidating its digital currencies inventory at unfavorable prices or constricting its mining operations or even relocating its operations to friendlier jurisdictions which may entail additional security risks.  The Company may liquidate a portion of its digital currency inventory, partially, to mitigate the aforementioned risk.

The Company also has risks associated with the continually evolving tax and regulatory environments in the countries where we operate, as described more fully under the heading "Industry subject to evolving regulatory and tax landscape" in the "Outlook" section above.  Any final decisions by tax or regulatory agencies with jurisdiction over the Company may have a material adverse impact on the Company's financial position and operations.

Some jurisdictions have taken steps to limit or disallow entirely the use of fossil fuels to generate energy for crypto currency mining.  Some jurisdictions have indicated that in the event their electrical grids are over-taxed by demand for electricity, allocation of power to crypto currency mining would be one of the first allocations to be curtailed or eliminated during periods of high demand.  While the Company's facilities are located in jurisdictions that have historically been friendly to crypto mining, there is no assurance that such policies will continue, and the Company notes an increased perception of anti-crypto and anti-crypto-mining sentiment across all jurisdictions.  In particular, the political environment may be subject to change as aging electrical grids are called upon to carry more electricity to meet seasonal demands and evolving demands related to the growth in electric vehicles, among other factors.

To the extent that cryptocurrency exchanges or other trading venues are involved in fraud or experience security failures or other operational issues, this could result in a reduction in cryptocurrency prices.  Cryptocurrency market prices depend, directly or indirectly, on the prices set on exchanges and other trading venues, which are new and, in most cases, largely unregulated as compared to established, regulated exchanges for securities, derivatives and other currencies.  For example, during the past three years, several cryptocurrency exchanges have been closed due to fraud, business failure or security breaches.  For instance, in November of 2022, FTX, a crypto exchange, collapsed following a report by CoinDesk highlighting potential leverage and solvency concerns involving FTX-affiliated trading firm Alameda Research.  FTX's collapse shook the volatile crypto market, which lost billions in value at the time, falling below a $1 trillion valuation.  By November 11, 2022, FTX's CEO stepped down and the company filed for bankruptcy.  The entire collapse, in which FTX went from having a value estimated at $32 billion to bankruptcy, took place over a ten-day period.  The collapse of FTX has had a wide impact on cryptocurrency markets, with comparisons made to the Enron scandal and Madoff investment scandal.  The FTX collapse has been described by United States prosecutors as "one of the biggest financial frauds in American history.

The collapse of FTX helped cause a 'daisy chain' of failures in the crypto lending industry and exposed systemic counterparty risks. During the week of FTX's collapse in early November 2022, the price of Bitcoin fell from over $20,000 to under $16,000.

Also, in early 2019, the QuadrigaCX trading platform ("Quadriga") ceased operations, which the Ontario Securities Commission attributed largely to fraudulent activity of its co-founder and CEO, Gerald Cotten.  Quadriga subsequently filed for creditor protection.  Clients of Quadriga were owed approximately an aggregate of $215 million and only approximately $46 million was recovered to pay such clients.

In many of these instances, the customers of the closed exchanges are not compensated or made whole for the partial or complete losses of their account balances.  While smaller exchanges are less likely to have the infrastructure and capitalization that provide larger exchanges with additional stability, larger exchanges may be more likely to be appealing targets for hackers and "malware" (i.e., software used or programmed by attackers to disrupt computer operation, gather sensitive information, or gain access to private computer systems) and may be more likely to be targets of regulatory enforcement action.

The Company cautions that current global uncertainty with respect to the spread of the COVID-19 virus and its effect on the broader global economy may have a significant negative effect on the Company.  In particular, as a result of the uncertainty surrounding the impact of COVID-19 on global supply chains, including increased shipping costs and delays in obtaining equipment from China, the Company faces risks that the Company's program to update and expand the Company's ASIC equipment will not be completed and delivered as currently anticipated, which may cause material adverse effects on the Company's operations and results.  Further, while the precise impact of the COVID-19 virus on the Company remains unknown, rapid spread of the COVID-19 virus may have a material adverse effect on global economic activity and could result in volatility and disruption to global supply chains, operations, mobility of people and the financial markets, which could affect interest rates, credit ratings, credit risk, inflation, business, financial conditions, results of operations and other factors relevant to the Company.

CAUTION REGARDING FORWARD LOOKING INFORMATION

This Management Discussion and Analysis contains certain "forward-looking information" within the meaning of Canadian and United States securities legislation.  Forward-looking information is based on the beliefs, estimates and opinions of the Company's management on the date the statements are made, and they involve a number of risks and uncertainties.  Consequently, there can be no assurances that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements.

Forward-looking information in this Management Discussion and Analysis includes information about the Company's use and profitability of the Company's computing power; plans for growth and scaling up strategies; the Company's strategic partnerships expected enhancements in the efficiency of the Company's ASIC mining operations; the Company's strategy to acquire, develop and operate data centres and potential growth of the Company's computing capacity;  expected electrical and mining capacity; the Company's plans to manage its data centres and trading operations from Bermuda; the value of the Company's digital currency inventory; the business goals and objectives of the Company, and other forward-looking information including but not limited to information concerning the intentions, plans and future actions of the Company.

The forward-looking information in this Management Discussion and Analysis reflects the current expectations, assumptions and/or beliefs of the Company based on information currently available to the Company.  In connection with the forward-looking information contained in this Management Discussion and Analysis, the Company has made assumptions about the expected delivery time for ASIC equipment; historical prices of digital currencies; electricity pricing; the ability of the Company to mine digital currencies in an environment consistent with historical prices; and that there will be no regulation or law that will prevent the Company from operating its business as it currently is operated.  The Company has also assumed that no significant events occur outside of the Company's normal course of business.  Although the Company believes that the assumptions inherent in the forward-looking information are reasonable, forward-looking information is not a guarantee of future performance and accordingly undue reliance should not be put on such information due to the inherent uncertainty therein.

This Management Discussion and Analysis also contains a "financial outlook" in the form of gross mining margins, which are intended to provide additional information only and may not be an appropriate or accurate predictions of future performance and should not be used as such.  The gross mining margins disclosed in this Management Discussion and Analysis are based upon management's best estimates but are inherently speculative and there is no guarantee that such assumptions and estimates will prove to be correct.

Risk factors that could cause future results to differ materially from those anticipated in these forward-looking statements and financial outlook are described in the "Risk Factors" section contained in this Management Discussion and Analysis, and the Risk Factors contained the Company's various filings on SEDAR (www.sedar.com) and EDGAR (www.sec.gov/EDGAR).  Readers are cautioned not to place undue reliance on forward-looking information or financial outlook, which speak only as of the date hereof or thereof.  We undertake no obligation to publicly release the results of any revisions to forward-looking information or financial outlook that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events except as required by law.

MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

In connection with National Instrument ("NI") 52-109 (Certification of Disclosure in Issuer's Annual and Interim Filings) adopted in December 2008 by each of the securities commissions across Canada, the Chief Executive Officer and Chief Financial Officer of the Company will file a Full Certificate in accordance with Form 52-109F1 with respect to the financial information contained in the unaudited condensed interim financial statements and the audited annual financial statements and respective accompanying Management's Discussion and Analysis.

Evaluation of Disclosure Controls and Procedures

No changes were made in the Company' design of internal controls over financial reporting during the quarter ended December 31, 2022, that have materially affected, or are reasonably likely to materially affect, the Company's internal controls over financial reporting except as follows.  The Company has hired an additional member to its internal accounting department during this quarter, making two new members hired in the last year.

Inherent Limitations of the Effectiveness of Internal Control

Due to inherent limitations in all controls systems, a control system can provide only reasonable, not absolute, assurance that the objective of the control system is met and may not prevent or detect misstatements or instances of fraud.  Management's estimates may be incorrect, or assumptions about future events may be incorrect, resulting in varying results.  Additionally, controls may be circumvented by the unauthorized acts of individuals, by collusion of two or more people or by Management override.

Additional information relating to the Company is available on SEDAR at www.sedar.com and on EDGAR at www.sec.gov/EDGAR.

FURTHER INFORMATION

Additional information relating to the Company, including filings that the Company has made and may make in the future with applicable securities authorities, may be found on or through SEDAR at www.sedar.com, EDGAR at www.sec.gov/EDGAR or the Company's website at www.hiveblockchain.com.  Additional information, including directors' and officers' remuneration and indebtedness, principal holders of Company's securities and securities authorized for issuance under equity compensation plans, is also contained in the Company's most recent management information circular for the most recent annual meeting of Shareholders of the Company.  In addition to press releases, securities filings and public conference calls and webcasts, the Company intends to use its investor relations page on its website as a means of disclosing material information to its investors and others and for complying with its disclosure obligations under applicable securities laws.  Accordingly, investors and others should monitor the website in addition to following the Company's press releases, securities filings, and public conference calls and webcasts.  This list may be updated from time to time.

SUBSEQUENT EVENTS

On January 11, 2023, the Company granted 1,200,000 restricted share units to directors and an officer of the Company with a fair value of C$3.10 per share vesting quarterly over a 12-month period.

Subsequent to the period ended December 31, 2022, the Company terminated the ATM Equity Program with HC Wainwright & Co. as sole agent.  The termination of the ATM Program was effective as of February 6, 2023. The ATM Equity Program was established on September 2, 2022, allowing the Company to issue and sell up to US$100 million aggregate number of common shares of the Company to the public from time to time, at the Company's discretion. As of the date of this announcement, the Company has sold 1,306,474 common shares under the ATM Equity Program for aggregate gross proceeds of $3,941,736 (C$5,235,413), aggregate cash commission of US$119,983 on the aggregate gross proceeds raised for net proceeds of US$3,821,753.