The collapse of cryptocurrency exchange FTX and general crypto market turmoil were not key factors in the decision to merge cryptocurrency mining company Hut 8 with US Bitcoin Corp.according to Hut 8 CEO Jamie Leverton.
On February 8, Leverton said the merger was primarily to provide diversified income and help scale the combined businesses.stating:
“I think this deal would have happened anyway. The ability to bring these businesses together seems incredibly complementary to us.”
The merger by shares was announced on February 7 and the combined company, now called Hut 8 Corp. or “New Hut,” will be headquartered in the United States rather than Canada.
Regarding the FTX crash in November, Leverton said fears were “starting to subside a bit” and interest was returning to the cryptocurrency sector..
He added: “I think we’re seeing a lot of interest coming back into this space, we’ve seen significant appreciation across the space so far in 2023.”
The merger of the two mining companies “is going to provide an incredible amount of scale,” he continued, adding that there will be “diversified income programs,” which is a good strategy for both companies independently.
According to reports, New Hut will have access to some 825 megawatts spread across six facilities in New York, Texas and the Canadian province of Alberta. Their total combined extraction capacity will be 5.6 exahashes per second (EH/s).
Commenting on the choice of location, Leverton said it was in the company’s best interest to have “diversified geographies,” adding:
“One of the benefits is [que la fusión] It provides us with that geographical diversification. There is uncertainty in the regulatory environments on both sides of the border,”
Hut 8 has a mining facility in North Bay, Ontario, but its operations have been suspended due to an ongoing court battle. with your energy provider.
The US Bitcoin facility in Niagara also has its own problems; there is an ongoing dispute with the city of Niagara Falls over resident complaints about noise levels.
The company offered more details about the merger in a presentation on February 8. The transaction is expected to close in the second quarter of 2023 and is subject to shareholder, regulatory, and exchange approval.
For more information on our proposed strategic merger with USBTC, please see our presentation, here: https://t.co/Wg1shII9ei pic.twitter.com/1TjHAYTTiw
—Hut 8 (@Hut8Mining) February 8, 2023
To learn more about our proposed strategic merger with USBTC, check out our presentation here: https://t.co/Wg1shII9ei pic.twitter.com/1TjHAYTTiw
Earlier this week, Leverton said that during the interim period, the firm plans to cover its operating costs through a combination of selling the bitcoin it mines, and exploring various debt options..
Hut 8 shares fell 8% on the day the merger was announced. Additionally, according to MarketWatch, Hut’s shares had fallen 1.2% on the day to $2.12 in after-hours trading.. The stock is currently trading 86% below its November 2021 all-time high of $15.28.
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