Hut 8Mining Corp. (NASDAQ:HUT), a digital asset mining companyfrom North America, has announced an all-stock merger of equals with anoperator of four Bitcoin (BTC) mining centers in the USA, US Bitcoin.
Accordingto the press release, the combined company will be named Hut 8 Corp. The primarygoal of the merger is to create a large scale publicly-trader crypto mining firm focused on diversifying revenue streams, cheaper mining and ESG practices.
The Boardsof Directors of both companies have unanimously agreed to merge, and the new Boardwill consist of the five directors of Hut 8 and the five directors of USBitcoin.
Bill Tai will retain his position as Chairman of the Board, Jaime Levertonwill remain as the CEO, and Asher Ganoot will still serve as President. Michael Howill be appointed the Chief Strategy Officer, while Shenif Visram will remain as theChief Financial Officer.
"Bringingtogether Hut 8's operational track record and diversified revenue streams withUS Bitcoin's scalable mining sites, sizeable hosting business, andindustry-leading managed infrastructure operations not only accelerates ourdiversified strategy and positions us for near-term growth, but alsoestablishes us as a strong, U.S.-based player that is ready and able to seizeadditional opportunities as they arise," Jaime Leverton, the CEO of Hut 8,said.
Higher Power and MiningCapabilities
The new Hut8 will gain access to a total of 825MW of gross power spread across six datacenters, each with the ability to mine, manage infrastructure and hostindependently. The post-merger mining potential of the two companies will reach5.6 EH/s.
"We'vebeen searching for the right partner to join us on our ambitious growth journeyfor some time and are confident that Hut 8 is the perfect fit," MichaelHo, the Co-Founder and CEO of US Bitcoin, said.
The companywill utilize energy from a mix of zero-emission and renewable sources. Themining industry has recently been betting on environmentally friendliersolutions after strong criticism suggesting that it is responsible forexcessive carbon dioxide emissions.
Watch the recent FMLS22 panel on Forex and crypto trends in 2023.
Crypto Miners Feel theBitcoin Blues
Although Bitcoin'sprice rebounded 40% from multi-month lows in January, the mining industry isfar from the results and revenues realized in 2020 or 2021.
Falling prices for BTCand other cryptocurrencies have caused many companies to cut back on theirworkforce, with miners earning $6 billion less in 2022 than the year before.
In Januaryalone, cryptocurrency companies cut 3,000 jobs. These included the cryptocurrencyplatform Luno, which reduced its staff by 35%, and the exchange Gemini, whichdecided to cut its workforce for the third time in nine months.
Miningcompanies are managing to produce more coins than before, even though thedifficulty of mining has increased. Still, this guarantees much lower revenuesdue to low profitability at current prices. Northern Data has increased itsproduction by 315% compared to last year, but this has not translated intobetter financial results in dollar terms.
In challengingmarket conditions, only the strongest can survive. Hence the decision by Hut 8and US Bitcoin to merge seems perfectly logical. The question is ifcryptocurrencies continue to remain cheap in the long term, whether this willlead to further industry consolidation.
Hut 8Mining Corp. (NASDAQ:HUT), a digital asset mining companyfrom North America, has announced an all-stock merger of equals with anoperator of four Bitcoin (BTC) mining centers in the USA, US Bitcoin.
Accordingto the press release, the combined company will be named Hut 8 Corp. The primarygoal of the merger is to create a large scale publicly-trader crypto mining firm focused on diversifying revenue streams, cheaper mining and ESG practices.
The Boardsof Directors of both companies have unanimously agreed to merge, and the new Boardwill consist of the five directors of Hut 8 and the five directors of USBitcoin.
Bill Tai will retain his position as Chairman of the Board, Jaime Levertonwill remain as the CEO, and Asher Ganoot will still serve as President. Michael Howill be appointed the Chief Strategy Officer, while Shenif Visram will remain as theChief Financial Officer.
"Bringingtogether Hut 8's operational track record and diversified revenue streams withUS Bitcoin's scalable mining sites, sizeable hosting business, andindustry-leading managed infrastructure operations not only accelerates ourdiversified strategy and positions us for near-term growth, but alsoestablishes us as a strong, U.S.-based player that is ready and able to seizeadditional opportunities as they arise," Jaime Leverton, the CEO of Hut 8,said.
Higher Power and MiningCapabilities
The new Hut8 will gain access to a total of 825MW of gross power spread across six datacenters, each with the ability to mine, manage infrastructure and hostindependently. The post-merger mining potential of the two companies will reach5.6 EH/s.
"We'vebeen searching for the right partner to join us on our ambitious growth journeyfor some time and are confident that Hut 8 is the perfect fit," MichaelHo, the Co-Founder and CEO of US Bitcoin, said.
The companywill utilize energy from a mix of zero-emission and renewable sources. Themining industry has recently been betting on environmentally friendliersolutions after strong criticism suggesting that it is responsible forexcessive carbon dioxide emissions.
Watch the recent FMLS22 panel on Forex and crypto trends in 2023.
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Crypto Miners Feel theBitcoin Blues
Although Bitcoin'sprice rebounded 40% from multi-month lows in January, the mining industry isfar from the results and revenues realized in 2020 or 2021.
Falling prices for BTCand other cryptocurrencies have caused many companies to cut back on theirworkforce, with miners earning $6 billion less in 2022 than the year before.
In Januaryalone, cryptocurrency companies cut 3,000 jobs. These included the cryptocurrencyplatform Luno, which reduced its staff by 35%, and the exchange Gemini, whichdecided to cut its workforce for the third time in nine months.
Miningcompanies are managing to produce more coins than before, even though thedifficulty of mining has increased. Still, this guarantees much lower revenuesdue to low profitability at current prices. Northern Data has increased itsproduction by 315% compared to last year, but this has not translated intobetter financial results in dollar terms.
In challengingmarket conditions, only the strongest can survive. Hence the decision by Hut 8and US Bitcoin to merge seems perfectly logical. The question is ifcryptocurrencies continue to remain cheap in the long term, whether this willlead to further industry consolidation.
