Bitcoin Miner Hut 8 Closes Better-Than-Expected Equity Round at $8.3M

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Miner Hut 8 said last week it had raised a total of $8.3 million from selling a 6% equity stake to investors, approximately $800,000 more than the original $7.5 million funding target.

"We're proud to close the first prospectus offering by a cryptocurrency mining company in Canada and further improve Hut 8's lead as one of the largest public bitcoin miners," said Jimmy Vaiopoulos, Hut 8's interim CEO, in a statement.

Ryleigh Ebron, an external spokesperson for Hut 8, said the company be able to increase mining capacity by more than a fifth to 1,150 petahash.

"This financing is expected to strengthen Hut 8's cash flows and balance sheet," Ebron added.

As a report from CoinDesk Research highlighted earlier this year, the company made a wafer-thin gain of just over $2 million in 2019.The stock price says it all: In April 2018, Hut 8 traded at CAD $4.50 but has since spiraled downwards, hitting a low of CAD $0.59 by mid-March this year.

In January, Hut 8 amended the agreement so it could buy mining equipment elsewhere.

Interestingly, Hut 8 said it will use all the new funding to buy mining equipment from Bitfury's rival, MicroBT. Most of the new rigs will arrive between July and November.

Hut 8 hopes the halving will make it harder for some of their competitors, the ones operating with older equipment, to stay in the game, said Ebron.

"The halving is arguably better for miners who can get access to the latest generation of bitcoin mining equipment as they are far more profitable and will benefit from the drop in network difficulty as older equipment continues to be turned offline," Ebron said.

Ebron also pointed out the miner is in a particularly advantageous position because lower electricity rates in Alberta mean Hut 8 can better weather fluctuations in the volatile bitcoin price.