Hut 8 Mining Locks in $50M Credit Agreement with Coinbase Credit
Hut 8 Mining, a Canadian Bitcoin mining giant, has secured a hefty credit facility from Coinbase Credit, a subsidiary of the renowned U.S. cryptocurrency exchange, Coinbase. On June 26, Hut 8 officially announced that it had inked a $50 million credit agreement with Coinbase Credit, involving Hut 8’s subsidiary, Hut 8 Holdings, as the borrower.
The loan proceeds, according to the announcement, are intended for general corporate purposes. A $15 million term loan included in the credit facility is anticipated to be funded at or shortly after the closing.
Staggered Loan Tranches Offer Financial Flexibility
The agreement offers Hut 8 the opportunity to receive an additional $20 million delayed-draw term loan in a second borrowing that is to occur between one and two months following closing. Furthermore, the facility presents a third option of drawing an additional $15 million delayed-draw term loan.
This final tranche will be the third borrowing given within 15 business days after the completion of the formerly announced merger between Hut 8 and U.S. Data Mining Group (also known as US Bitcoin), the announcement notes.
Enhancing Bitcoin Treasury Management Ahead of the Halving
Hut 8’s CEO, Jaime Leverton, believes the credit facility will provide the firm with extra financial flexibility. The CEO emphasized the importance of the credit facility in light of the upcoming Bitcoin halving, which is projected to slash the BTC miner block reward from 6.25 BTC to 3.125 BTC. “This ensures that we can maintain our dynamic Bitcoin treasury management strategy going into the halving,” Leverton stated.
Hut 8’s Dedication to its ‘HODL Strategy’
Hut 8 has emerged as a key player in the Bitcoin mining industry, continuing to hold onto BTC despite significant financial challenges faced by the industry. As some mining firms like Argo Blockchain resorted to selling parts of their BTC holdings during the 2022 bear market, Hut 8 remained committed to its long-standing “HODL strategy.”
As of March 31, 2023, the Canadian firm held a total of 9,133 self-mined Bitcoin in custody, according to its Q1 2023 financial update. “Leading up to the halving, we will continue to focus on strategically increasing our stack of Bitcoin and growing our HPC business including exploring opportunities in the growing artificial intelligence market,” Leverton shared in the financial update.
