HIVE Digital co-founder Frank Holmes stated this week that several sanctioned nations are actively mining Bitcoin (BTC) in secret, turning to the crypto as an alternative revenue stream in the face of U.S. financial restrictions.

Holmes made the claims during a recent interview with the Roundtable. He tied a recent drop in global mining difficulty to military strikes targeting power infrastructure in Iran, suggesting the country’s military was using energy resources to mine Bitcoin and generate hard currency.

The comments reflect a broader trend in which governments cut off from traditional financial systems are leveraging crypto mining to fill economic gaps.

Holmes said this is not limited to Iran, implying that other countries facing US sanctions are also participating in similar operations, though much of it remains undisclosed.

He further claimed that Bitcoin has become a strategic asset, especially for nations struggling to access dollars. Mining provides a direct route to accumulate value outside the traditional financial ecosystem.

Holmes said that disruptions to mining facilities can now be observed in network-level data such as hash rate fluctuations.

HIVE ramping up production

While pointing to adversaries of the US using crypto mining as a financial lifeline, HIVE Digital is pursuing growth in U.S.-aligned nations.

The company recently expanded its footprint in Paraguay, acquiring infrastructure to scale operations more rapidly. The decision required divesting a portion of its Bitcoin holdings, but Holmes described it as a strategic trade-off to accelerate production.

Paraguay’s supportive regulatory stance and energy resources make it a key location for HIVE’s expansion, particularly compared to more politically volatile countries in the region.

The move comes amid growing sentiment that Bitcoin mining will continue to flourish in jurisdictions aligned with U.S. economic interests, particularly under the current administration.

HIVE has now surpassed 14 exahashes per second (EH/s) in mining capacity, with a goal of reaching 25 EH/s by the end of November. At current output, the company is generating approximately $315 million in annualized revenue, placing it among the top contenders in terms of efficiency and scale.

The remarks highlight a shifting landscape where mining activity is not just about profitability, but increasingly intertwined with global alliances, sanctions evasion, and power projection through digital infrastructure.

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The number of active addresses in Bitcoin has increased, with a peak of 912,300 on February 28. The most recent instance of this level was on December 16, 2024, when Bitcoin was trading at $105,000, Glassnode data shows.

Traders are closely monitoring the outcome of this surge, which some analysts interpret as a precursor to a potential market shift.

Number of active BTC addresses. Source: Glassnode

Market Prepares For Potential Capitulation

Capitulation is a phrase that refers to the sharp price swings that occur when investors sell in distress. The latest drop in Bitcoin below $84,000 has raised concerns, as a retreat below this level might result in over $1 billion in leveraged long liquidations, CoinGlass data shows.

Previously, similar events occurred in the marketplace. Panic selling often signals a bottom before a comeback when it reaches its peak. This could be a watershed moment for Bitcoin if it follows previous trends.

BTC exchange liquidation map Source: CoinGlass 

Active Addresses Surge As Market Adjusts

The rising count of active addresses suggests that more people are moving Bitcoin. This could mean traders are either reacting to market swings or rearranging their assets. Whether favorable or negative, this trend is evident before notable changes in the market.

Important events in Bitcoin’s price behavior have aligned with years’ worth of network activity surges. Traders are keeping a tight eye to see if this rise in addresses causes a rally or more falls.

Bitcoin Key Metric Signals Oversold Conditions

The Market Value to Realized Value (MVRV) Z-score of Bitcoin is among other important benchmarks. March 1 saw this metric at 2.01. A lower score would signal a possible bottom since it implies that the asset is now reaching oversold levels.

When the MVRV Z-score crosses oversold area in the past, Bitcoin’s price has reversed. Though it is not a guarantee, speculators consider this data point while assessing the direction the market will travel.

Support And Resistance Levels Are Crucial

The ability of Bitcoin to keep a price over $80,500 will determine either its stabilization or continuation of slide. If prices drop below $84,000, there is likely much more reduction since liquidations could increase the pressure.

Concurrently, the development of a recovery could follow from strong buying interest at these levels. Since they know a rebound might provide the market fresh momentum, many traders are closely tracking these pricing points.

As Bitcoin negotiates this uncertain phase, technical indicators and investor mood will probably affect its next movements. Whether the alpha coin finds a bottom or suffers more drops will depend much on the next several days.

It’s likely that both technical signs and how investors feel will affect Bitcoin’s next moves as it moves through this challenging phase. The next few days will be very important in figuring out whether it hits bottom or continues to fall.

Featured image from Gemini Imagen, chart from TradingView