Per the CEO of Hut 8, a bitcoin mining company listed on the Toronto stock exchange, major financial institutions have made inquiries to purchase bitcoin directly from the firm. Additionally, the Hut 8 executive emphasized the forthcoming halving event’s “big impact,” noting a surge in demand juxtaposed with a reduction in available bitcoins. Financial Giants […]
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Bitcoin miner Hut 8 has secured an additional $15 million from a subsidiary of the United States-based cryptocurrency exchange, Coinbase, according to a Jan. 12 statement.
The miner revealed that the new deal represents an amendment and restatement of its previous $50 million credit facility with the cryptocurrency trading platform, bringing its cumulative credit portfolio to $65 million.
Last year, Hut 8 procured a $50 million credit facility from Coinbase, with an added provision for an optional $15 million term loan.
The BTC miner plans to use the newly acquired $15 million loan for general corporate purposes, mirroring the allocation of funds from the preceding financial arrangement. The new loans also carry the same interest rate as the previous ones.
“All amounts borrowed under the Credit Facility will bear interest at a rate equal to (a) the greater of (i) the federal funds rate on the date of the applicable borrowing, and (ii) 3.25%, plus (b) 5.0%.”
Hut 8 further explained that the loan is secured by its interest in an unspecified amount of Bitcoin held in Coinbase Custody, adding that the loan will mature 364 days after the date of the first borrowing.
Meanwhile, Hut 8 recently obtained court approval from the Ontario Superior Court of Justice to acquire four natural gas power plants in Ontario.
The approval empowers Hut 8’s newly established Canadian subsidiary, BidCo, to execute the acquisition of a 40 MW facility in Kapuskasing, a 110 MW facility in Kingston, a 120 MW facility in Iroquois Falls, and a 40 MW facility coupled with a Bitcoin mining operation in North Bay.
Along with the approval, a novel funding arrangement is set to materialize between Macquarie and BidCo. Macquarie partnered with the miner to submit the bid for the North Bay Bitcoin mine.
This financial agreement will manifest as an operating lease facility, with Macquarie securing a 20% stake and Hut 8 retaining an 80% equity interest. The anticipated closure of this transaction is slated for Feb. 15, contingent upon the resolution of all pending litigation claims.
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Hut 8 Mining reported a revenue of about $19.2 million in Q2, a significant decline from $43.8 million recorded in the same period last year, mainly caused by increased mining difficulty.
Toronto, Canada-based Bitcoin mining and blockchain infrastructure company, Hut 8 Mining Corporation (NASDAQ: HUT) released its Q2 2023 financial results on Monday, August, 14. According to the announcement, the company experienced significant Bitcoin mining challenges, which reflected a sharp decline in total revenue. As a result, HUT shares closed Monday trading at $2.78, down 6.4 percent from the day’s opening price. However, HUT shares regained about 2.52 percent during the after-hours session to trade around $2.85.
The heightened demand for Bitcoin and other digital assets amid mainstream adoption has significantly increased the number of crypto miners around the world, hence causing a sharp uptick in mining difficulty. According to the latest on-chain data, the Bitcoin network had a total hash rate of about 415.17 EH/sd thus a mining difficulty of about 52.39 T, with the halving event about 255 days away.
During the second quarter that ended on June 30, Hut 8 announced that it mined about 399 Bitcoins, which represented a decline of approximately 58 percent during the same period last year. The company noted the suspension of operation at its North Bay Facility, and ongoing electrical issues at its Drumheller facility significantly contributed to the decline in Bitcoin mined. Notably, the company announced that it sold about 396 of the 399 Bitcoin mined during the second quarter and received proceeds of about $14.7 million.
Nonetheless, the company announced that it continues to push beyond its boundaries to ensure its long-term growth prospects. Moreover, mainstream adoption of Bitcoin by institutional investors is expected to take place in the coming years.
“We continued to build momentum toward closing our transaction with USBTC by progressing toward receiving regulatory approvals to proceed and improving our projected post-merger self-mining capacity to 7.5 EH/s,” said Jaime Leverton, CEO of Hut 8.
Notably, the company’s high-performance computing operations generated $4.2 million of primarily monthly recurring revenue during the second quarter compared to about $4.7 million in Q2 2022. During the three months that ended on June 30, Hut 8 announced that it installed a total hash rate of about 2.6 EH/s, excluding the company’s North Bay facility.
“While we continued to face mining challenges during the second quarter at Drumheller, which are reflected in decreased revenue and fewer Bitcoin mined, we were successful in strategically managing our costs,” said Shenif Visram, CFO of Hut 8.
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Hut 8 Mining Corp, the U.S. digital asset mining company, has released its financial results for Q2 2023, ending on June 30. The disclosed statistics present a challenging quarter for the corporation, marked by decreased mining output and a notable fall in revenue.
Hut 8’s revenue experienced a decrease of $24.6 million, falling to $19.2 million in Q2 2023 from $43.8 million in Q2 2022. This decline is partly attributed to a reduced number of Bitcoin mined — a significant 58% drop from 946 to 399 Bitcoins within a year.
The root causes of this mining slowdown include an increase in average Bitcoin network difficulty, a halt in operations at the North Bay Facility, and ongoing electrical issues at the Drumheller site.
In response to these adversities, Hut 8 has implemented several proactive measures. This includes the introduction of new custom firmware to regulate the power supply’s maximum output voltage, ensuring equipment operates within secure limits, expanding repair staff, and acquiring new hardware to expedite repairs and hasten miners’ returns online.
Nonetheless, these efforts are currently struggling against high energy rates, which have resulted in further curtailment at the Drumheller site.
Outside of Bitcoin mining, the company’s high-performance computing (HPC) branch generated $4.2 million of recurring monthly revenue in Q2 2023, slightly down from $4.7 million in Q2 2022. CFO Shenif Visram noted that this dip resulted from discontinuing certain low-margin products and services and customer churn, partially offset by new sales.
Despite the fall in revenue and the limited number of Bitcoin mined, Hut 8 managed to control its costs strategically. As of June 30, 2023, the company held 9,136 self-mined Bitcoin in custody or pledged as collateral, with a market value of $368.7 million. During Q2 2023, 399 Bitcoin were mined, and 396 Bitcoin were sold, generating proceeds of $14.7 million.
Hut 8’s Q2 2023 results depict a scenario of strategic cost management and adaptation in the face of difficulties. Despite a fall in revenue and a significant decrease in Bitcoin mined, the company continues to invest in new strategies and work towards improving its self-mining capacities.
The company is not alone in seeking alternative methods of financial assurance. Another U.S. miner, Riot Platforms, has seen increased returns from selling energy back into the grid, offsetting other mining-related issues. Riot also decreased its cost to mine Bitcoin to $8,300 per BTC.
According to Hut 8’s results, its @Mining Cost per Bitcoin@ is almost three times higher than Riot at $27,148.
Hut 8 Mining announced that it is prepared to acquire assets from Validus Power Corp. as the latter faces insolvency, according to an Aug. 11 statement.
Hut 8 Mining, a North American digital asset mining company, has entered a transaction “support agreement” with Macquarie Equipment Finance Ltd over energy supplier Validus.
Previously, Validus supplied energy to Hut 8’s mining facility in North Bay, Ontario. However, the company’s assets have now come under the control of a court-appointed receiver, KSV Restructuring Inc., following an order from the Ontario Superior Court of Justice.
In January 2023, Hut 8 filed a lawsuit against its energy supplier, Validus Power Corp, marking a critical juncture in a dispute brewing since late 2022. The case stemmed from Validus’s alleged failure to meet its contractual obligations, as stipulated in the power purchase agreement (PPA) it held with Hut 8. According to the statement, Validus committed to delivering 100MW of power to Hut 8’s mining facility in Northern Ontario.
However, Hut 8 claimed that Validus fell short of this commitment, prompting the mining company to issue a default notice in November 2022. In retaliation, Validus suspended its energy supply to Hut 8’s operations, citing incomplete payment as the reason for this action.
Despite the ongoing contention, Hut 8 denied the allegations made by Validus and pushed forward with the lawsuit, reflecting its commitment to uphold environmental, social, and governance (ESG) principles.
Validus was the energy supplier of Hut 8’s North Bay mining facility, which hosts over 8,800 ASIC mining rigs with a hash rate of 0.84 EH/s, according to Hut 8 data.
As part of the arrangement initiated by Macquarie, a secured creditor of the Validus Entities, there is a possibility of submitting a “stalking horse bid.” If it proves successful, this bid could lead to the resolution of ongoing litigation between Hut 8 and certain Validus Entities.
The potential acquisition of assets from Validus by Hut 8 would see changes for the latter. Since Validus was previously an energy supplier to Hut 8’s mining facility, the assets could involve energy infrastructure, power supply agreements, or physical assets related to power generation and distribution.
These types of assets could help Hut 8 enhance its energy capacity for its mining operations, potentially leading to increased efficiency and scale.
However, it’s worth noting that this prospective acquisition is contingent on several specific conditions. These include the receiver’s acceptance of a stalking horse bid and court approval.
Bitcoin mining companies like Hut 8 Mining Corp. are exploring various strategies, including acquiring assets from financially struggling entities like Validus as a diversification strategy.
Riot, another key US miner, reported over $70 million in profit in its last report, with a critical percentage coming from energy sales. The miner has generated alternative revenue means to offset Bitcoin price swings.