Hut 8 Mining (HUT.T) has finished detailing their repayment roadmap for their USD$20 million loan with Genesis Global Capital, according to a press release.
The loan originally gave Hut 8 the ability to old a larger bitcoin balance by using its bitcoin as collateral for a loan. This strategy worked out better than expected because of Bitcoin’s bull run, which increased far more than their 8% loan interest per year.
“Paying the Genesis loan is a major step in improving Hut 8’s balance sheet and cash flow by turning US$1.6M of interest expenses into US$0.8M of interest income. Our ability to secure cost savings via low interest loans and subsequently paying them off in full is a testament to our performance and ability to stand out as a low cost bitcoin miner,” said Jimmy Vaiopoulos, chief financial officer of Hut 8.
The simple facts of the matter is that Bitcoin is doing well, therefore Hut 8 is doing well. They’re a bitcoin mining company with operations in Canada that creates value through their low production costs and the rising price of Bitcoin—of which they have many. The company provides investors with direct exposure to Bitcoin without any of the hassle of actually maintaining your own stash, wallet, security, and exchange-related issues.
The company intends to repay the entirety of the loan by mid-February due to a one month repayment notice otherwise baked into the original agreement.
With Bitcoin zooming along like it has, you’d almost expect Hut 8’s chart to show a general upward trajectory. In this case, they’re actually down %10.6 today, losing $0.53 to trade presently at $4.45 and appear to be in the middle of a correction as they’re rebounding from a high of almost $7 by the end of last year. After inspecting the Bitcoin charts—that basically tracks with Bitcoin’s price trajectory as well, down almost five percent on the day, and 14.8% over the past week.
—Joseph Morton
