Hut 8, the result of a merger with US Bitcoin Corporation last November, has garnered attention due to its diversified business model, according to a research report by Benchmark released today (Monday).

A Close Look at Revenue Streams and Crypto Reserves

Benchmark analysts highlighted the company's various revenue streams, including self-mining, managed services, hosting , and involvement in high-performance computing and artificial intelligence sectors. Initiating coverage on Hut 8, Benchmark issued a buy rating with a $12 price target. At the time of publication, Hut 8's shares were trading 5.2% higher at $8.47.

The report also noted Hut 8's bitcoin holdings, ranking second among listed miners as of March 31, with 9,102 bitcoins held in reserve. This substantial bitcoin reserve not only provides the company with a substantial liquidity cushion but also positions it to benefit from price rallies in the cryptocurrency market.

“Hut trades at a discount to its bitcoin mining peers that we expect to shrink as the company executes on its self-mining expansion plans,” Mark Palmer, an analyst, wrote. “Management has focused on actions aimed at reducing the company’s cost of mining bitcoin and its realized cost of energy and increasing its cash flow.”

Hut 8's crypto holdings are valued at approximately $592 million, which accounts for about 82% of its market capitalization.

Shutting Down Alberta Facility for Cost Savings

Hut 8 recently closed its Bitcoin mining facility in Alberta, Canada, as part of its efforts to optimize operations and improve financial performance, as reported by Finance Magnates. The company has planned to relocate efficient miners to its Medicine Hat site while retiring old and inefficient ones. This move is expected to increase the company's cash flow, reduce mining costs, and boost Bitcoin production by approximately 11% per EH.