Bitcoin miner Hut 8 doubles down on diversification, discipline around halving

CEO Asher Genoot said Hut 8 is looking at ways to boost its presence in the high-performance computing and AI realms

article-image

Artwork by Crystal Le

share

Hut 8 looks to deploy its large stack of bitcoin holdings with “discipline” heading into the bitcoin halving while further diversifying its revenue streams, the company’s chief executive said.

The company, which completed a merger of equals with US Bitcoin Corp last year, tallied $60.6 million in revenue during the second half of 2023. Net income was $6.2 million over that span.

Nearly 70% of that revenue comes from crypto mining, CEO Asher Genoot said during the company’s earnings call Thursday.

But Hut 8 seeks to further diversify its revenue streams across its managed services business, the CEO noted — as well as boost its standing in the high-performance computing (HPC) and AI realms. 

Read more: Hut 8 switches CEOs as it eyes ‘new strategic direction’ after merger

The company jumped into the HPC space by buying wireless connectivity company TerraGo in January 2022. It signed an agreement last year to offer colocation HPC services to Canadian health authority Interior Health. 

It is not the only one looking into the segment. Hive Digital Technologies rebranded last July as part of a pivot to HPC. Core Scientific said earlier this month it would lease up to 16 megawatts of capacity in its Austin data center to cloud provider CoreWeave.

Hut 8’s HPC business is “sub-scale today,” Genoot acknowledged. He added that the HPC business will need more investment to be equipped to handle AI machines.

“But we are excited about that business because we see it as a foundation to be able to grow, especially when you look at GPUs, AI and data centers and look at the different parts of the value chain in that ecosystem,” he said on the call.

Seeking out growth, with discipline

Hut 8 held 9,110 bitcoin (BTC), as of Feb. 29 — valued at roughly $650 million Thursday morning.   

The miner is set to use its bitcoin reserves to take advantage of growth opportunities around the Bitcoin halving — expected on or around April 20. At that point per-block mining rewards are set to drop from 6.25 BTC to 3.125 BTC, putting financial pressure on the segment’s participants. 

Read more: The Bitcoin halving is just weeks away — here’s how miners have prepared

Hut 8 is considering various M&A opportunities like buying sites and properties, as well as machine purchases. But Genoot previously told Blockworks that Hut 8 would not seek out growth at all costs — adding that it would look to not overpay for sites, for example, when possible to develop its infrastructure for less.

Executives noted during the Thursday call that it would be closely monitoring the prices of mining machines, adding the company may choose to wait until after the halving, or when newer-generation machines are available. 

Similarly, Core Scientific CEO Adam Sullivan recently told Blockworks his company would look to buy machines — at lower prices — from struggling miners unable to afford parts of their existing orders.

It is also set to continue nixing inefficiencies, like retiring old machines — as it did upon shuttering operations at its Drumheller facility in Alberta, Canada earlier this month.

Read more: Miners continue money-conscious moves ahead of the Bitcoin halving

“You’ll see us continuing to be creative in how we maximize the value of every machine, whether that is done at the end of life, finding a better home for them in terms of generating the most amount of profit or under-clocking a certain percentage of them to increase efficiency,” Genoot said. 

Hut 8’s stock price was up about 21% on the day, as of 12 pm ET Thursday.


Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.

Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. Subscribe to the On the Margin newsletter.

The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.

Tags

Upcoming Events

Salt Lake City, UT

MON - TUES, OCT. 7 - 8, 2024

Blockworks and Bankless in collaboration with buidlbox are excited to announce the second installment of the Permissionless Hackathon – taking place October 7-8 in Salt Lake City, Utah. We’ve partnered with buidlbox to bring together the brightest minds in crypto for […]

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research

AERODROME TEMPLATE.png

Research

Aerodrome is a "MetaDEX" that combines elements of various DEX primitives such as Uniswap V2 and V3, Curve, Convex, and Votium. Since its launch on Base, it has become the largest protocol by TVL with more than $495M in value locked, doubling Uniswap's Base deployment.

article-image

And a look into the newest name on the Trump ticket: Sen. JD Vance

article-image

Plus, Imran Khan’s intriguing experiment on the speeds of crypto onramps

article-image

The SEC has signaled a timeline to issuers that could lead to a July 23 launch for the ETH funds, people close to the process told Blockworks

article-image

PayPal has unequivocally made a name for itself as a crypto adopter among fintech giants

article-image

Also, a look into how the highly-debated SAB 121 could end up shaking out for crypto custodians

article-image

Vance, an Ohio Republican, is largely seen as crypto-friendly