Hut 8, the Canadian Bitcoin mining firm, has received final clearance from the Supreme Court of British Columbia to proceed with its planned merger with US Bitcoin (USBTC), according to a report by Cointegraph. This merger, initially announced in February 2023, will create 'New Hut', a publicly-traded U.S.-based entity.
One of the key highlights of the merger is the potential to open up 825 megawatts of Bitcoin mining capacity, which spans six distinct Bitcoin mining and data centre facilities. However, the closing of the merger remains subject to a few remaining requirements, including approval from the shareholders of USBTC.
Hut 8 anticipates that the final transaction which formalizes the merger and the creation of 'New Hut' will occur before the end of 2023. Moreover, 'New Hut' plans to list its shares on the Nasdaq and Toronto stock exchanges, trading under the ticker symbol $HUT.
Paving the Way for 'New Hut'
Furthermore, Digital Currency Group's subsidiary Foundry Digital, which focuses on institutional mining and staking, announced a formal partnership with Hut 8 in August 2023. The collaboration will see Hut 8 supporting various business offerings for Foundry through its Ontario-based data centre. The partnership has been in place since 2020.
In the second quarter of 2023, Hut 8's revenue decreased from $25 million to $19 million, marking a decline of 56% year-over-year compared to the same period in the previous year when the company reported $44 million in revenue. Additionally, the company mined only 399 Bitcoins during the quarter, which was a steep drop of 58% from the previous year.
Hut 8's profit from mining operations also took a hit, dropping to $3.2 million from $14.9 million in the second quarter of the previous year. As of June 2023, the company's installed hashrate was 2.6EH/s. According to a report by Finance Magnates, the challenges faced by Hut 8 were the suspension of operations at its North Bay facility and electrical issues at the Drumheller facility.
Hut 8's Highlights AI Demand
Jaime Leverton, the CEO of Hut 8, recently said: "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."
Hut 8 is witnessing a growing demand for artificial intelligence (AI) and high-performance computing (HPC) as it undertakes the relocation of 6,400 mining rigs from its idle North Bay site in Ontario, Canada. This strategic move comes amidst an ongoing legal dispute with third-party energy supplier Validus Power, leading to the suspension of operations at the North Bay facility since November 2022.
Besides that, the Canadian Bitcoin mining firm recently strengthened its financial resources with a credit facility worth $50 million from Coinbase Credit, a subsidiary of the renowned U.S. cryptocurrency exchange Coinbase. This credit facility, which was obtained in June, is aimed at supporting Hut 8's general corporate activities.
