Hut 8’s Post-Merger Future Appears Promising with $12 Price Target: Benchmark

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Hassan Shittu

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Hassan Shittu

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April 21, 2024

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According to Benchmark’s coverage of Hut 8, a prominent Bitcoin miner with an optimistic “buy” rating and a price target of $12, Hut 8 has a promising future ahead of it.Following the merger with US Bitcoin Corporation (USBTC) last November, Hut 8 (HUT) has emerged as a robust entity with a diversified business model, boasting multiple revenue streams, as noted in a research report by Benchmark released on Monday.

Hut 8 Receives Buy Rating from Benchmark with a $12 Price Target

According to the report, Hut 8 was assigned a buy rating and a $12 price target. At the time of publication, Hut 8’s shares were trading 14% higher at $9.22.Benchmark’s evaluation takes into account Hut 8’s diversified business model. Hut 8 taps into multiple revenue streams, including self-mining, managed services, hosting, high-performance computing, and artificial intelligence.

“Hut trades at a discount to its bitcoin mining peers that we expect to shrink as the company executes on its self-mining expansion plans,” analyst Mark Palmer stated.

Additionally, the research note underlined the market value of Hut 8’s bitcoin reserves, which provide the company with a considerable liquidity cushion and the potential to capitalize on upticks in bitcoin prices. The analysis added that Hut 8 was the second-ranked listed miner regarding bitcoin holdings, with 9,102 bitcoins kept in reserve as of March 31. Hut 8’s bitcoin holdings are valued at approximately $592 million, equivalent to 82% of its market capitalization.

Hut 8 Mining and US Bitcoin Merge to Form Hut 8 Corporation

On February 7, Hut 8 unveiled plans for a definitive business combination agreement between the boards of directors of Hut 8 Mining and US Bitcoin (USBTC). 

Our new “Fundamentals” series documents the foundational elements of Hut 8’s platform. First in the series is Reactor, our proprietary energy curtailment software originally developed by US Bitcoin Corp.

Reactor enables Hut 8 to curtail miner-level energy consumption when the… pic.twitter.com/JoZSwHGgM7

— Hut 8 (@Hut8Corp) April 19, 2024

The merger was finally announced in November 2023, resulting in the formation of Hut 8 Corporation, headquartered in the United States.

Starting December 4, Hut 8 Corp shares began trading under the $HUT ticker on the Nasdaq and Toronto Stock Exchanges. As per the merger terms, legacy Hut 8 Mining shareholders will receive 0.2 shares of the new HUT stock for each Hut 8 share they hold. Additionally, USBTC shareholders will receive 0.6716 shares of the new stock for each of their existing shares.

As of March 31, Hut 8 Corporation managed around 884 MW of power capacity across 11 sites. This infrastructure includes five sites in New York, Texas, and Alberta provinces in Canada, boasting a total hash rate of 25.5 EH/s. 

Additionally, the company operates a 250 MW hosting business, a managed services operation, and a high-performance computing business spanning five data centers in Canada.

Since the completion of the merger, Hut 8’s management has prioritized initiatives to reduce the company’s cost of mining bitcoin and its realized energy cost while concurrently enhancing its cash flow, Palmer noted.