Good morning. I'd like to welcome everyone to today's webcast for HIVE's fiscal 2021 financial results for the first quarter ended June 30, 2020. My name is Darcy Daubaras, and I'm the Chief Financial Officer for HIVE. I'm joined on today's call by Frank Holmes, the Interim Executive Chairman. Before we begin, I'd like to remind you that during today's presentation, we will be making comments containing forward-looking information. I invite you to read our financial disclosure for some of the risks and uncertainties that may affect HIVE's performance in the future. As such, actual results may differ materially from the views expressed today. For further information on these risks and uncertainties, please consult our most recent MD&A and filings on SEDAR. We will also be referencing non-IFRS measures. Reconciliations of these measures are included in our MD&A.
Unless otherwise indicated, please note all figures referred to on today's presentation are in U.S. d ollars. I'll now turn the call over to Frank Holmes.
Thank you, Darcy. I'm Frank Holmes, the Interim Executive Chairman and CEO. I think I'm really delighted to be able to talk to everyone and give you an update. As Darcy just mentioned, is the CFO, and Darcy joined HIVE at the same time that I became the interim executive chair, and took on the role of repositioning the company. We've made tremendous strides through the crypto bear winter season, and then the rebound that's taking place. I'd like to give you some highlights that's recently taken place. We've assumed control of Iceland data center operations in June 2020. This marks the last step in the 18-month process to take full control of HIVE's global data center operations from former strategic partner. We anticipate it to result in a 50% reduction in operational costs in Iceland beginning just now. We are currently upgrading and expanding data center operations.
That's a big focus right now is upgrading all of our GPU chips from 4 GB to 8 GB, and we'll talk a little bit more of that in the presentation. We've also completed a similar transition, which we talked about previously in Sweden. It's all really constructive and positive, and we'll also give you some comments in the presentation on Ethereum. We're a diversified business by acquiring operations in Canada during the COVID. It's in Canada, in Quebec, and it's had its challenges with Bitcoin, getting equipment, and other things. It's interesting as trying to, in this sort of focus of being truly global in our strategy. We've had a third straight quarter profitability driven by Ethereum mining, increases in operational efficiencies, and just starting and expanding our Bitcoin footprint in production.
We've increased the tangible assets, ongoing capital investments, appreciation of digital currency portfolio due to the increase of Ethereum and Bitcoin. It's really important for all investors to recognize the DNA of volatility of crypto. If the S&P 500's daily volatility is ±1% for 70% of the time, for gold, it's 70% of the time, 1%, exactly the same. When we step out to crypto, it's ±5%, which is just a huge difference. It's a non-event for Ethereum or Bitcoin to go up or down 5%. The stocks behind that even have a higher multiple. In the presentation, we'll sort of highlight how HIVE has become a proxy for those who want to trade crypto, not through a crypto exchange, but through the capital markets, and HIVE has become that proxy. Next, please.
Great.
To Darcy now. Thank you, Darcy.
Perfect. Thank you very much, Frank. Turning onto slide eight. We generated income from digital currency mining in the first quarter of 2021 of $6.6 million, and this is from coin production of approximately 25,500 Ethereum and about 154 Bitcoin. The decrease in revenues that we experienced versus the same period in fiscal 2020 was primarily due to a decline in the production of Bitcoin mining stemming from the shutdown of prior cloud mining agreements in Q3 of fiscal 2020 due to their unprofitability. This was offset by an increase in Ethereum mining that we experienced, driven by the reboot of our flagship Sweden data center operation in July of 2019 after being offline during the first quarter of fiscal 2020. The production of Bitcoin mining on the cloud resumed during the first quarter of fiscal 2021 following our acquisition of our new data center in Canada.
Our gross mining margin, which equates to our revenues minus direct operating and maintenance costs, decreased in absolute U.S. dollars but has stayed strong as % of revenues at 39%. Gross mining margin is also partially dependent on various external network factors. This includes things like the mining difficulty, the amount of digital currency rewards the miners receive, and the market price of the digital currencies at the time of mining. Turning to slide nine, our adjusted EBITDA dropped in this first quarter of fiscal 2021 to $2.6 million, versus $4.3 million in the prior year comparative quarter. The Ethereum mining margins that we experienced during this quarter enabled us to acquire additional data center assets and assist us in diversifying our business.
As Frank had mentioned, we're proud to continue to record consecutive quarters of positive adjusted EBITDA and profitability, which is a reflection of our attention on reducing operational and overhead costs in the organization from top to bottom. I will highlight that gross mining margin and adjusted EBITDA are non-IFRS figures. The net income for the first quarter of fiscal 2021 was $1.8 million, compared to $5.6 million in the prior year comparative. This decrease was driven predominantly by gains recorded on investments in digital currencies in the prior year period. Moving over to slide 10, you can see that we have a very, and continue to have a healthy balance sheet. Our cash position stood at $1.2 million at June 30th, 2020. This was strengthened along with an additional $6.6 million in digital currencies, primarily, as you can see, in Ethereum and Bitcoin.
We also have $12.5 million in amounts receivable and prepaids. We maintain a strong net cash position and healthy working capital to fund our operations and growth. Subsequent to the quarter end, as we reported, we did receive over $2.5 million from the Swiss tax authorities from VAT returns that were due to us. That was very encouraging to be able to get those accounts receivable in and help to once again strengthen our balance sheet and our cash on hand. At this point, I'd like to turn it back to Frank.
Thank you, Darcy. Yes, as Darcy said, we took that $2.5 million, immediately started to deploy that into upgrading all of our Ethereum facilities. That's just a key strategy here, an urgent one in this next six months. Next visual, please. Slide 11. This is a bit complex here for looking at, but basically it's trying to identify that Bitcoin miners' revenue have increased since the halving of May 11th. What you saw is that one thing that can really hurt your profit margins is the difficulty. As more people come in to mine, then you get less, it's a smaller piece of the pie. With that halving, basically, there are also less coins even to wrestle over every 10 minutes.
From that end, what we're seeing is that the Bitcoin, and then you look at these numbers here, the difficulty increased due to computing power for next-generation equipment has slowly been coming online. There's been lots of delays and disappointments from the major provider of that, which has been Bitmain, who've had their own problems internally. We are seeing logistics issues due to COVID, and we are seeing this getting supply, getting frames or any type of equipment that you need or things assembled. The movement of that from Asia over to Europe or to North America, it just continuously has new hurdles, and it's more expensive.
Now with COVID, the surge that's taken place in Europe, Eastern Europe, moving workers, technical people from Croatia or from Germany to facilities in Sweden and Iceland is gonna become a little more difficult at this stage. I think we're gonna have to deal with those bumps in the road. You just have to slow down your car, and then you can accelerate again. Right now, it appears a bump is taking place on the movement of workers. We'll get through this. What's interesting for me is in the Bitcoin, you're not seeing all the new equipment that was expected to come online. It hasn't come online, and I think that that's something that's a global phenomena. Next, please.
Once again, another sort of complex visual, and it's trying to understand what happens when the halving takes place, and what is the probability for Bitcoin to go up. As you can see in this visual on the left, each time there was a halving, it took several months, and then all of a sudden, you started seeing Bitcoin rise in price. A lot of players get sort of drop off, not being able to mine, do not have the capital to get the new equipment, or you can't get the equipment on a timely basis. There's been lots of press releases by crypto companies announcing all this equipment, but this equipment's not coming on stream maybe till next year.
There's been so many delays and disappointments. From those that put out real big checks to Bitmain, and that equipment's just not there, and it's not going to come on. What we've done in our strategy was to use cash flow and go out and place orders, not to write a big check and tie up all our capital, with the knowledge that we may not get our equipment on a timely basis. We've had a slower process in building out our facility in Quebec, but we're still looking for this increase in the Bitcoin price. I think a lot of people are disappointed it didn't go to $15,000 and hold itself, but I think it's just a matter of time. The next one is a stock-to-flow model.
It's a model that's used by some to try to forecast Bitcoin, higher Bitcoin prices, when they're going to take place. It's all over the internet. It's so crazy when I see some of these numbers of $1 million a coin, et cetera, but there's lots of sort of bullish forecasts. Ourselves, we're just trying to be pragmatic in how we build out and position ourselves in this space. Next, please. HIVE's mining facility is scaling up the next generation of equipment. We've been slowly, as I said just a few minutes ago, building out the facility. Quebec has its own challenges, compared to, say, Sweden and Iceland. It's just interesting.
Each of these jurisdictions, it doesn't matter if it's Canada or it is Iceland or Sweden, each of them have their unique challenges and hurdles that you have to get around, you have to think about, you have to be thoughtful about, and be careful you just don't blow capital. That's why what we've done here is to be very cautious and prudent of how we're deploying capital to build out this facility. Next, please. We celebrate HIVE mining a record number of Ethereum rewards in the first quarter of our 2021 fiscal year. The record number was driven by a massive demand for transactions for Ethereum, which includes stablecoins and this DeFi application. If you're not aware of DeFi, if you go on the internet, you go to Google, or you go to YouTube, there's lots of simple video explanations of what DeFi is.
Decentralized Finance is the acronym stand for. What you're seeing is that there's almost new pools of capital where people are turning in their Ethereum or they're turning in their Bitcoin to get a yield on their investments and doing securities lending, but it's not the normal stock lending, it's crypto lending. There's high returns on those investments. What happens is that most of those new DeFi models and applications are based on the protocol of Ethereum. It reminds me of what took place when Ethereum went from, when we first started this company, Ethereum was around $300 a coin, and it went to $1,400 in a matter of about three months. That explosive move was because of the growth, the unprecedented growth in ICOs and Initial Coin Offerings, and most of those were based on the protocol of Ethereum.
What we're seeing is, once again, the explosion in DeFi is all of a sudden creating this unique demand for Ethereum. Ethereum prices have had a spectacular run. There's been a couple of bonus payments in mining Ethereum. What's important here is that we've been able to increase the cash flow as a result of the increased production from our data centers and the significant rise in price of Ethereum and lower cost to mine that we have achieved as a result of assuming control of our data center operations. These increased cash flows have allowed us to support our recently acquired Canadian data center and invest in the upgrading of the data centers in Europe. These upgrade projects are being challenged by, as I mentioned, these global supply chain interruptions due to COVID-19. Slide 16, please.
As we outlined in the performance of our shares versus Ethereum and Bitcoin, as well as our competitors, I think I pretty well covered this visual of how this increased production and how we benefit in the summer quarter of Ethereum. Next, please. On this visual, we can see the bounce back from underperformance encountered 2019 following our dispute with Genesis Mining and it being resolved and some institutional sellers that some of them had to sell because of market cap. They have a fund, and some of these funds have rules to them, and these rules, they say that if the market cap is under $100 million U.S. for X number of days, then they have to liquidate. If it goes back above in a stage, then they can come back and buy into it. I think what's important for investors is it was absorbed.
After a lot of this sort of tax loss selling took place at the end of the year last year, in the last quarter, and we had a rebound in Ethereum prices. It reminds me of what they used to have the marginal gold mine would explode as gold prices rise. HIVE just took off as Ethereum rose, it just reminds me so much of a gold mining stock to the price of gold. The best part is that now we've been able to get control and drive down those costs. There's a whole slew of operational efficiencies. Audit is dropped by 50%. Energy prices have dropped by close to 50%. These are significant. Some are one time and legal bills have declined. Most important is understanding how we hedge energy prices in Sweden.
We've learned a lot, and we've applied this to lock in inexpensive energy. Today, the least cost of energy right now is Sweden for us. Now you can see here the bounce, and it's amazing for me to just to witness how the volume can explode. Some days of up to 20 million shares of trading, and we've continued to just be a stellar performer and become that go-to stock. Next, please. I'll turn back to Darcy. Can you.
Yeah. I think that, just piggybacking off what you've said, Frank, is since we've been on with the company approximately two years ago, we've continued to drive towards the cost reductions, trying to get those operating and overhead costs as low as possible to try to get our data centers the most efficient as possible, because within this industry, we know it's very volatile, and another crypto winter is probably going to come. By trying to make ourselves as lean and mean as we can, we'll be better positioned to be able to continue and be able to survive those kind of winters when they come along.
Well, thank you so much, Darcy, on that. As I want to thank all the investors that have stayed with us, and just recognize how our correlation to Bitcoin and Ethereum is so great on a daily basis. With that, please, if you have any questions, send them in to us. We'll make sure we can respond to them. I think that that's a wrap, Darcy.
That's perfect. Yes. Thank you very much, everybody, for attending this morning. Have a great weekend going into the weekend, and everybody, stay safe out there, please.