- Coinbase Credit has extended a $50 million credit facility to North American crypto miner Hut 8, providing significant financial flexibility and aiding in the execution of a dynamic Bitcoin treasury management strategy.
- The arrangement, structured in three tranches, will facilitate a merger of Hut 8 with U.S. Data Mining Group, giving birth to a United States-domiciled entity known as “New Hut.”
In a significant development within the cryptocurrency mining industry, Hut 8, a North American crypto mining company, has announced a $50 million credit agreement with Coinbase Credit. The substantial credit facility is set to provide Hut 8 with enhanced financial flexibility while bolstering its dynamic Bitcoin treasury management strategy.
The credit facility, which is structured in three tranches, begins with an initial $15 million term loan. The second borrowing, scheduled to occur between one to two months after the initial disbursement, will supply Hut 8 with an additional $20 million delayed-draw term loan. The final portion of the credit, another $15 million delayed-draw term loan, is due to be released within 15 business days after the completion of the highly anticipated merger between Hut 8 and the U.S. Data Mining Group.
This impending merger is set to create a new United States-domiciled entity fittingly named “New Hut.” Post-merger, “New Hut” is expected to have access to approximately 825 MW of gross energy across all six sites, spanning operations in self-mining, hosting, and managed infrastructure.
Speaking about this financial maneuver, Hut 8’s CEO, Jaime Leverton, remarked,
“This credit facility gives us additional financial flexibility. At the same time, it ensures that we can maintain our dynamic Bitcoin treasury management strategy going into the halving.”
The credit facility comes as a welcome boost for Hut 8. According to the company’s financial results for the year and quarter ending December 31st, 2022, while its Bitcoin holdings increased by 65%, the Canadian firm experienced a slump in revenue by over 13% during the same period. This strategic credit line from Coinbase Credit equips Hut 8 with the necessary capital to navigate its fiscal challenges and seize new growth opportunities in the fast-paced world of cryptocurrency mining.
