Hut 8 secures $50M loan to boost ‘financial flexibility’ ahead of merger, halving

Hut 8 produced 147 BTC in May and sold 179 BTC for $6.8 million

article-image

Elisabeth Coelfen/Shutterstock modified by Blockworks

share

Bitcoin mining company Hut 8 aims to enhance its “financial flexibility” by securing a loan prior to its upcoming merger with US Bitcoin Corp. and the anticipated bitcoin halving.

The proceeds of a $50 million credit facility — with lender Coinbase Credit — is to be used for “general corporate purposes,” the company said Monday, though declined to detail specific uses.

Hut 8 CEO Jaime Leverton added in a statement that the credit facility allows the company to maintain its “dynamic bitcoin treasury management strategy” ahead of the next bitcoin halving. 

The supply of new bitcoins awarded to miners is halved at each halving event. Data from BitOoda indicates that bitcoin (BTC) prices have typically increased in the six months following each of the previous halvings.

Read more: Bitcoin halving a year out: Here’s what to expect

“We have one of the largest self-mined bitcoin stacks of any publicly traded company, and this credit facility allows us to maintain our HODL strategy while giving us financial flexibility,” a Hut 8 spokesperson told Blockworks in an email.

Hut 8 sold more bitcoin than it generated in May — producing 147 BTC during the month while selling 179 BTC for $6.8 million. Still, the company had 9,233 “unencumbered” bitcoins in its reserves as of May 31, it said in a June 9 news release. 

The credit facility also comes as Hut 8 prepares to close its merger with US Bitcoin Corp — a deal first revealed in February.

Hut 8 said earlier this month that the combined company, set to be called Hut 8 Corp, is set to have a hash rate capacity of 7.5 exahashes per second (EH/s) across facilities in Alberta, Canada, as well as in New York, Nebraska and Texas.

A $15 million term loan is expected to be funded around the time of the credit facility’s closing, as well as the option for an additional $20 million one or two months later. A third loan tranche of an additional $15 million would come within 15 days after Hut 8’s combination with US Bitcoin Corp. is final.


Don’t miss the next big story – join our free daily newsletter.

Tags

Upcoming Events

Hilton Metropole | 225 Edgware Rd, London

Mon - Wed, March 18 - 20, 2024

Crypto’s premier institutional conference returns to London in March 2024. The DAS: London Experience: Attend expert-led panel discussions and fireside chats Hear the latest developments regarding the crypto and digital asset regulatory environment directly from policymakers and experts.

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

Research report - cover graphics (1).jpg

Research

In this report, we dive into crypto private market data to gather insights on where the future of the industry is headed. Despite a notable downturn in private raises, capital continues to infuse promising projects that aim to transform payments, banking, consumer experiences, community, and more, with 2023 being the fourth-largest year for crypto venture capital.

article-image

The stock price jump comes after Coinbase reported ending its seven-quarter run of net losses during the fourth quarter

article-image

BUZZ holds shares of Coinbase, Robinhood and MicroStrategy

article-image

Opinion: Even though I didn’t pay for my “Diamond Hands” burger with BTC, don’t let that fool you into thinking that crypto’s development is futile

article-image

The results mark “a major positive inflection point,” one analyst says, as the exchange carries net income momentum into a crypto rally

article-image

While the slate of 10 US spot bitcoin funds have tallied $4.6 billion of net inflows thus far, half of the field is lagging the leaders

article-image

Trading volumes totalled $154 billion in Q4, including $125 billion in institutional volume