Mining company Hut 8 listed on Nasdaq, holding 9,366 bitcoins accounting for 80% of its market value

Originally listed on the Toronto Stock Exchange, mining company Hut 8 merged with USBTC and is now listed on the NASDAQ in the United States under the ticker symbol: HUT. Hut 8 holds 9,366 bitcoins valued at approximately $338 million, accounting for over 80% of its stock market value.

Introduction to Hut 8

Hut 8 is a digital asset mining company headquartered in Toronto, Canada, with two digital asset mining facilities and five high-performance computing data centers. Hut 8 supports traditional data center industries through cloud, hosting, and colocation services while also providing services for emerging next-generation technologies, including AI, machine learning, visual effects rendering, and Bitcoin mining.

Financial Situation of Hut 8

Due to the following issues, Hut 8's 2023 revenue significantly decreased compared to the previous year:

• Energy input issues at the Drumheller mine
• Suspension of operations at the North Bay facility
• Decrease in mined Bitcoins due to the increase in average Bitcoin network difficulty
• Ethereum network transitioning consensus mechanism from Proof of Work (PoW) to Proof of Stake (PoS) in Q3 2022, leading to the suspension of such mining activities and a shift to Filecoin

As of the end of September this year, Hut 8 reported a net loss of CAD 64.16 million, approximately USD 46.83 million. However, the high-performance computing (HPC) business has shown stable development, and a five-year agreement signed with Interior Health will generate a stable source of income in the future.

As of September 30, 2023, the company's installed hash rate is 2.6 EH/s, excluding the North Bay facility.

Hut 8 CFO Shenif Visram stated:

We continue to focus on managing our costs prudently while actively seeking ways to grow the business, including the court-approved pseudo-auction acquisition of four natural gas facilities in Ontario, which, if successful, can provide us with pricing certainty for energy and create revenue options for the future.

Mining Bitcoin and Filecoin

As of September 30, 2023, the company held a total of 9,366 self-mined Bitcoins pledged as collateral, valued at CAD 341.4 million, approximately USD 249 million. In Q3 2023, Hut 8 mined 330 Bitcoins, sold 100 Bitcoins, and earned CAD 3.9 million in revenue.

In addition, Hut 8 is also involved in mining the distributed storage network Filecoin and currently holds 55,008 FIL tokens, valued at approximately CAD 240,000, around USD 180,000.

Filecoin's project continues to grow, with Bitmain launching dedicated mining machines for FIL.

Is it better to buy MicroStrategy or mining company stocks?

Hut 8 currently has a total of 220 million shares outstanding, with a market value of USD 413 million based on yesterday's closing price of USD 1.86. The market value of the 9,366 Bitcoins it holds is approximately USD 338 million, accounting for over 80% of its market value at the Bitcoin price of USD 36,100 before the deadline.

Previously, detailed reports on MicroStrategy's Bitcoin strategy were also covered. Business intelligence software company MicroStrategy uses software revenue as a downside protection for its operations, continuously purchasing Bitcoin through debt issuance and new stock issuance. Since integrating Bitcoin into its core business plan in August 2020, MicroStrategy's stock price has risen by 242%, outperforming Bitcoin's 192% increase during the same period. The 158,400 Bitcoins it holds also account for about 80% of its stock market value.

However, as a mining company, Hut 8 still has a large number of mining machines that can be liquidated in case of emergencies, and a rise in Bitcoin would directly impact its revenue. In this regard, whether it is better to buy MicroStrategy or mining company stocks remains a question. More introductions and analyses of mining company stocks will be provided in the future.

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