Hut 8 ‘self-mining plans’ make it competitive post-halving: Benchmark

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Hut 8, a Bitcoin miner based in the United States, aims to broaden both its self-mining activities and various income sources, as per Benchmark’s assessment. This strategy is expected to enhance Hut 8’s competitiveness in the Bitcoin mining industry following the halving event.

In a research note dated April 22, which was reviewed by CryptoMoon, Benchmark senior analyst Mark Palmer described how the newly formed company, “new HUT”, resulted from the merger between the previous HUT and US Bitcoin Corporation. He highlighted that this fusion brought about a business model with various sources of income for new HUT.

TradingView reports that Hut 8’s stock is currently priced at $9.22. Benchmark has begun covering this stock and has established a predicted price of $12 – representing a nearly 30% rise from the current value.

Hut 8’s current mining hash rate of 5.4 exahashes per second (EH/S) is significantly lower than Marathon Digital’s self-mining leader of 27.8 EH/s. However, according to Palmer, this difference is expected to narrow down in the future.

“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.”

Palmer based his price estimation on Hut 8’s various income sources: self-mining, cloud computing, advanced computing, and AI services.

In Palmer’s opinion, Hut 8’s varied income sources beyond self-mining give it an edge over the long term. This diversity protects the company from significant losses during Bitcoin price drops that many other publicly traded competitors might experience.

Furthermore, Palmer noted that Hut 8’s enterprise value-to-revenue ratio stands at 2.6, which is slightly less than the average of 3.1 for its publicly traded Bitcoin mining competitors such as Marathon Digital, Riot Platforms, and others.

Palmer acknowledged that Hut 8 should enhance its hash rate capacity. However, he pointed out that the company’s possession of 9,102 Bitcoins offered it a “substantial financial buffer” and enabled it to seize profitable opportunities if Bitcoin’s price surged substantially in the near future.

February 7th saw Hut 8 make an announcement concerning a change in leadership. Previously serving as CEO, Jamie Leverton was succeeded by Asher Genoot, who at the time held the position of president and was a current member of the board of directors.

A weeksbefore, Hut 8 underwent organizational changes following a report from short-seller JCapital. The report alleged that Hut 8 was facing legal issues and advised investors to be wary of potential price manipulation in the Bitcoin miner based in Florida.

Hut 8 strongly disagreed with the share seller report, labeling it as an intentional spread of false information. According to them, the document contained numerous inaccuracies and distorted data.

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2024-04-23 05:18