Hut 8 to deploy bitcoin reserves in new treasury strategy

Hut 8’s new treasury strategy is set to let the company use its bitcoin reserves for growth initiatives.

“Bitcoin held in reserve may be deployed through direct sales, option strategies or other approaches,” Hut 8 said in a press release.

“Focusing on operations while maintaining a strong balance sheet today will enable us to focus heavily on evaluating both organic and inorganic growth opportunities post-halving as distressed assets come to market at favorable valuations. As we evaluate these opportunities, we will determine on a case-by-case basis whether it is most accretive to fund them through direct bitcoin sales, option strategies or other approaches,” CEO Asher Genoot said in an email to Blockworks.

The mining company plans to utilize its new strategy for strategic initiatives, which could include upping its operating scale.

The announcement comes a little over a month before the fourth bitcoin halving, which will drop mining rewards from 6.25 bitcoin (BTC) down to 3.125 BTC per block.

“As we head into the halving, we anticipate that distressed assets will become available at favorable valuations and create opportunities for further growth. A core principle of our new strategy is to deploy capital thoughtfully and strategically to maintain a strong balance sheet and position ourselves to evaluate these opportunities as they arise,” Genoot said.

Genoot was announced as CEO earlier this month following a “merger of equals” with US Bitcoin Corp back in November.

Earlier this month, he told Blockworks that his goal is “to invest money to drive shareholder return and shareholder value creation.”

The mining company also said that the treasury strategy “to fund capital expenditures” at its newest site in Culberson County, TX. A press release says the company expects to bring mining online at the site in the second quarter of this year.

“The Culberson County site creates the optionality for the Company to expand its self-mining fleet or to transition existing self-mining activity from Granbury, [TX] and Kearney, [NE] to the site,” Hut 8 said.

It also expects the cost to mine bitcoin will be 30% lower than at its Granbury, TE and Kearney, NE sites. Earlier this month, Marathon Digital announced that it planned to take over operations from Hut 8.

Marathon said, at the time, that it would be able to “fully recognize the operational and economic benefits of owning these assets” by removing Hut 8.

Updated Feb. 27, 2024 at 1:48 pm ET: Added statement from Hut 8 CEO Asher Genoot.

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