Hut 8 Merges with US Bitcoin to Fight Crypto Winter

Hut 8
Mining Corp. (<a href=”https://www.financemagnates.com/tag/hut-8/” target=”_blank” rel=”follow”>NASDAQ:HUT</a>), a digital asset mining company
from North America, has announced an all-stock <a href=”https://www.financemagnates.com/terms/m/merger/” class=”terms__main-term” id=”7631c19b-b9f3-43ee-a0cf-d4f8094270bc” target=”_blank”>merger</a> of equals with an
operator of four Bitcoin (BTC) mining centers in the USA, US Bitcoin.US Bitcoin and Hut 8 Join
ForcesAccording
to the press release, the combined company will be named Hut 8 Corp. The primary
goal 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 Boards
of Directors of both companies have unanimously agreed to merge, and the new Board
will consist of the five directors of Hut 8 and the five directors of US
Bitcoin. Bill Tai will retain his position as Chairman of the Board, Jaime Leverton
will remain as the CEO, and Asher Ganoot will still serve as President. Michael Ho
will be appointed the Chief Strategy Officer, while Shenif Visram will remain as the
Chief Financial Officer.”Bringing
together Hut 8’s operational track record and diversified revenue streams with
US Bitcoin’s scalable mining sites, sizeable hosting business, and
industry-leading managed infrastructure operations not only accelerates our
diversified strategy and positions us for near-term growth, but also
establishes us as a strong, U.S.-based player that is ready and able to seize
additional opportunities as they arise,” Jaime Leverton, the CEO of Hut 8,
said.Higher Power and Mining
CapabilitiesThe new Hut
8 will gain access to a total of 825MW of gross power spread across six data
centers, each with the ability to mine, manage infrastructure and host
independently. The post-merger mining potential of the two companies will reach
5.6 EH/s.”We’ve
been searching for the right partner to join us on our ambitious growth journey
for some time and are confident that Hut 8 is the perfect fit,” Michael
Ho, the Co-Founder and CEO of US Bitcoin, said. The company
will utilize energy from a mix of zero-emission and renewable sources. The
mining industry has recently been betting on environmentally friendlier
solutions after strong criticism suggesting that it is <a href=”https://www.financemagnates.com/cryptocurrency/debunking-5-myths-to-help-you-understand-bitcoins-mining-sustainability/” target=”_blank” rel=”follow”>responsible for
excessive carbon dioxide emissions</a>.Watch the recent FMLS22 panel on Forex and crypto trends in 2023.Crypto Miners Feel the
Bitcoin BluesAlthough Bitcoin’s
price rebounded 40% from multi-month lows in January, the mining industry is
far from the results and revenues realized in 2020 or 2021. Falling prices for BTC
and other <a href=”https://www.financemagnates.com/terms/c/cryptocurrencies/” class=”terms__secondary-term” id=”b091101e-6e02-4b36-aa0e-7c972dfdd6ed” target=”_blank”>cryptocurrencies</a> have caused many companies to cut back on their
workforce, with <a href=”https://www.financemagnates.com/cryptocurrency/why-bitcoin-miners-made-6-billion-less-in-2022/” target=”_blank” rel=”follow”>miners earning $6 billion less</a> in 2022 than the year before.In January
alone, cryptocurrency companies cut 3,000 jobs. These included the <a href=”https://www.financemagnates.com/cryptocurrency/crypto-platform-luno-sheds-35-of-workforce/” target=”_blank” rel=”follow”>cryptocurrency
platform Luno</a>, which reduced its staff by 35%, and the <a href=”https://www.financemagnates.com/cryptocurrency/third-times-the-charm-gemini-cuts-its-workforce-once-again/” target=”_blank” rel=”follow”>exchange Gemini</a>, which
decided to cut its workforce for the third time in nine months. Mining
companies are managing to produce more coins than before, even though the
difficulty of mining has increased. Still, this guarantees much lower revenues
due to low profitability at current prices. <a href=”https://www.financemagnates.com/cryptocurrency/btc-miner-northern-data-increases-its-crypto-production-by-315-in-2022/” target=”_blank” rel=”follow”>Northern Data has increased its
production by 315%</a> compared to last year, but this has not translated into
better financial results in dollar terms.In challenging
market conditions, only the strongest can survive. Hence the decision by Hut 8
and US Bitcoin to merge seems perfectly logical. The question is if
cryptocurrencies continue to remain cheap in the long term, whether this will
lead to further industry consolidation.