Hut 8 – Bitfury Backed Portable Cryptomining
|Current Share Price||$4.40|
|52 Week High||$2.11|
|52 Week Low||$7.91|
|Shares Outstanding (MM)||82.4|
|Warrants Outstanding (MM)||1.3|
|Options Outstanding (MM)||0.6|
|Fully Diluted (MM)||83.7|
|Market Cap (MM)||$ 362|
Hut 8 is a cryptocurrency mining and blockchain infrastructure company established through an exclusive partnership with Bitfury, the biggest Bitcoin miner outside of China. Bitfury have 172 megawatts of data centers globally and has mined over a million tokens and estimates its most recent annual revenue was $350-million. Hut 8 is the only miner in the world who has guaranteed access to the chipsets used to mine cryptocurrency, through their partnership with Bitfury.
The ASIC (application-specific integrated circuit) chips for bitcoin mining are produced predominately by Bitmain (based In China) and secondly by Bitfury, who sell the chips, mining rigs, along with their unique BlockBox AC system.
The BlockBox AC is a self-contained bitcoin data centre in a 40-foot marine container, complete with an innovative air cooling system and 100,000 ASIC chips. All the BlackBox AC needs to be up and running is a suitable and affordable power source and internet access.
The BlockBox AC is one of the first mobile Bitcoin mining units that has the scale of a full-size data center and allows for mobility. This feature allows Hut 8, to be very nimble and select locations based on electricity costs and other factors.
Hut 8’s current locations have secured power at an average price of 3.5 U.S. cents per kilowatt-hour, which is one of the lowest costs in the world.
Hut 8 have plans on building out their modular data centers in Alberta and potentially Quebec. With the Maintenance of the data centres to be provided Bitfury. They have purchased 22 of the BlockBox AC data centers and they intend on having 57 BlockBox data centres operational by September 2018.
Here is the profitability of each BlockBox AC (source: www.cryptocompare.com)
If you multiple that by 57 Blockboxes you begin to see the picture (57 x $1.44M USD = $82M USD)
Hut 8 has mined a total of 1000 bitcoins and has also reserved both ASIC and GPU chips from Bitfury to fulfill up to an additional 157 MW of capacity in 2018.
Hut 8 has raised over $200 Million from PP subscription receipt financing prior to the listing on the TSX-V including investments from over 45 financial institutions from US and Canada. Bitfury currently own 43% of Hut 8 and this essentially gives Bitfury / Hut 8 a nimble vehicle to get access to the capital markets so they can quickly build their large infrastructure across Canada and internationally.
Bill Tai (Chairman and Director) – Originally trained as a semiconductor chip designer became an early Silicon Valley investor and Board member of Bitfury and Treasure Data.
Michael Novogratz (Director) – Billionaire investor and former hedge fund manager-turned-crypto evangelist. Former principal and a member of the board of directors of Fortress Investment Group and CIO of the Fortress Macro Fund.
Valery Vavilov (Director); – Founding member and CEO of Bitfury. Entrepreneur with +15 years of experience in IT and Business management.
Andrew Kiguel (President and CEO, Co-founder) – Newly appointed and former Managing Director of GMP Securities. He has over 20 years of capital markets experience along with a solid knowledge of the Blockchain industry.
Kyle Appleby – CFO – Over 10 years experience as a public and private company CFO both domestic and international and previously worked as an accountant for several public accounting firms in Canada.
Hut has secured sustainable cheap power sources, favorable land leases, and have exclusive access to purchase BlackBox AC Data centers. Those 3 factors put them miles ahead of the competition and they have a funded capacity for 62 MW of operations (Hive has a funded capacity of ~44 MW).
Hut 8 also have the benefit of being able to pay for part of the Blackboxes $~2M sticker price in Hut 8 shares (800,000 shares and $1.2M in Cash), which highlights Bitfury’s commitment to Hut 8.
With a solid and vested (43% ownership of Hut 8) partnership in place with Bitfury and the ability to quickly access additional capital via the capital markets, Hut 8 should be in a position to accelerate their growth and plan to be the lowest cost vertically integrated miner in North America. Hut 8 is a great way for institutional and retail investors to get exposure to crypto-mining market and certainly have the team to execute on their lofty plans. It feels like the mass selloff of crypto and blockchain stocks is largely over and this is a quality name that could see some tremendous growth and trade as a proxy to Bitcoin.
Fortune Favours the Bold
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