Overview of HUT 8 Mining Corp Earnings for Q2 FY2018

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HUT 8 Mining Corp Earnings for Q2 FY2018

Hut8 Company recently announced the second quarter earnings report. Let us just provide the overview of the announcement. If you wish to take the Bitcoin exposure then Hut 8 Mining is the one of the best potential Company with zero debt. It mines the Bitcoin and Bitcoin only. We’ll be covering more detailed analysis in future periods.

ABOUT HUT 8 MINING CORP.

Hut 8 provides investors with direct exposure to bitcoin, without the technical complexity or constraints of purchasing the underlying cryptocurrency. Investors avoid the need to create online wallets, wire money offshore and safely store their bitcoins. Hut 8 provides a secure and simple way to invest.

Hut 8 Mining Corp., HQ in Toronto, is a cryptocurrency mining and blockchain infrastructure company established through an exclusive arrangement with the Bitfury Group, the world’s leading full-service blockchain technology company. Through the Bitfury Group, Hut 8 has access to a world-leading proprietary mix of hardware, software and operational expertise to construct, optimize and manage data centers in low-cost and attractive jurisdictions. Hut 8 is led by a team of industry experts and intends to provide investors with exposure to blockchain processing infrastructure and technology along with underlying cryptocurrency rewards and transaction fees.

Key Points

Hut 8 Mining is Largest Bitcoin Mining Company in North America. It has 2 operational centres

Company’s Competitive Advantages are

  • Hut 8 Is Fully Funded – Raised $108 million through two financings; Fully funded for the entire 66.7 MW power capacity; Mined over 2,600 bitcoin; No Debt
  • Secure, Low-Cost Electricity – Operating 66.7 MW in Drumheller and Medicine Hat, Alberta; Hut 8 can purchase additional power from the grid in the City of Medicine Hat; Electricity in Medicine Hat is generated from combination of natural gas and wind power; 10 Year electricity supply agreement and land lease agreement at the City of Medicine Hat
  • Advanced Chips & Technology – Secure access to Bitfury’s latest generation chips, data center technology and software; Bitfury provides turn-key service to install, service and maintain BlockBox datacenters; Hut 8 has exclusive option for future acquisition & development of data centers as well as a comprehensive and proprietary mix of hardware, software, installation and operational services in North America
  • Bitfury Partnership – One of the largest bitcoin miners in the world, in business since 2011; Manufactures their own proprietary ASIC chips; Delivers, exclusively to Hut 8, a bitcoin mining solution; Own approximately 44% of Hut 8

Bitcoin Only 

If you wish to take the Bitcoin exposure then Hut 8 Mining is the best Company. It mines the Bitcoin and Bitcoin only. It does not indulge into other cryptocurrencies. Bitcoin is the primary source of revenue and the expense of mining Bitcoins is their primary expense. After mining the Bitcoins, they do hold it themselves. This is shown under the Current Asset section. It is the multiplication of (old coins + new addition of coins for the quarter) multiplied by the Bitcoin prices.

News Covered So Far On Hut 8

Below are the two news which we covered in June and July month. The effect of this capacity expansion will be covered in the coming quarters.

Hut 8 (TSXV: HUT) (OTCQX: HUTMF) Completes Construction at Medicine Hat Facility Ahead of Schedule, 40 BlockBoxes Now Operational

Hut 8 (TSXV:HUT) Adds 16 BlockBox Data Centers, Doubles Bitcoin Mining Capacity

Chart of Hut 8

We are certainly missing some point here. We agree that Bitcoin prices are still under pressure. But the downtrend is somewhat stopped. Assuming Bitcoin prices remains at same level and Hut 8 increases the production prices, the net effect will be a positive revenues (stable per bitcoin price * increased number of mined bitcoin i.e. volume increase). So the price should have been up in that sense. One of the reasoning could be investor being skeptical about the Bitcoin prices and hence the Hut 8 stock price didn’t see the jump.

Disclaimer

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