US Bitcoin Corp and Hut 8 to partner in joint business
The crypto-asset market is experiencing a downturn due to domestic and global factors. In addition to bankruptcies and scandals, there has been a record drop in the value of the digital currency, causing significant losses for companies and investors. Analysts can’t predict how long the crisis in the market will last. However, the industry will likely be unable to recover fully during 2023. To stay afloat, several companies are making bold decisions. US Bitcoin Corp is among such companies.
It has become known that Bitcoin and Hut 8 of Canada have signed a merger agreement. As a result of the business merger, a new company Hut 8 Corp, will be formed, located in the United States. Thus, the structure’s assets will consist of 6 facilities with a total hash rate of 5.6 EH/s with a disposable capacity of 825 MW. The companies will own equal shares of 50%. The capitalization will be approximately $990 million.
Bitcoin and Hut 8 activity
According to US Bitcoin, Hut 8 is a worthy partner for building a solid business. The Canadian miner uses an efficient process management system and has a strong position in the crypto market due to its diversified revenue sources. This approach to doing business meets all US Bitcoin requirements for building a solid structure and scaling the company.
The transaction is subject to regulatory approval. The merger is expected to be completed in the second half of 2023. As part of the agreements between the operators, Hut 8 allocated about $6 million to transfer Bitcoin assets to the new entity. The funds were taken from the company’s reserves and presented in bitcoin.
Hut 8 shares are traded on two stock exchanges, Toronto and New York. It has yet to be discovered how the new company will be listed. To do so, it must get approval from the securities commissions. It should be noted that as soon as it became known of the merger, the share price of Hut 8 fell by 7.14% to $2.2.
In February 2023, US Bitcoin was ordered to stop mining cryptocurrencies. The court order requires the company to pay a fine of $10,000 for each day it continues to operate after receiving the ban. At the same time, if mining is resumed after a certain period, the amount will increase to $25,000. The ban was due to charges of violating U.S. law, which US Bitcoin brought in late 2022.