Hut 8 Mining (HUT) undervalued compared to competitors

Hut 8 Mining (HUT) could be undervalued compared to its competitors. Hut 8 Mining is one of North America’s oldest and largest bitcoin mining companies. Their mining operation is self run and located in Alberta, allowing for significantly less overhead costs due to self management, cheaper energy, and colder climates. Hut 8 holds the most self-mined Bitcoins at over 3000.

It was only until in the last 3 months that MARA and RIOT overtook HUT in hashrate due to their recent fleet additions. After spending $30 million USD on NVIDIA CMPs, HUT expects their hashrate to be 1.8 EH/s by mid Q3 2021. They already have a huge lead in terms of self-mined Bitcoin and with the influx of 100 million cash for growth they will only build on that lead.

So why invest in HUT stock?

Hut 8 is one of Canada’s oldest and largest Bitcoin miners. Their mining operation is self run and located in Alberta, allowing for significantly less overhead costs due to self management, cheaper energy, and colder climates. Hut 8 has one of the highest installed capacity rates in the industry and is #1 globally in held, self-mined Bitcoin of any crypto miner or publicly traded company. Until this week the biggest question was will they ever make it to NASDAQ? Well on June 15th, they did. The first Canadian bitcoin mining company to do so, and they listed on their highest tier (Nasdaq Global Select Market). Not even RIOT or MARA are on that tier.

Currently, the combined power of their entire mining operation is 1.073 EH/s. This puts it behind RIOT and MARA, however in Q3 of this year we will see them upgrade to 1.8 EH/s. On June 15th they sold 20 million shares at CAD$5.00 per Offered Unit to Canaccord Genuity Corp for 100 million CAD in cash which will bring in tens of thousands of more miners.

Hut 8 holds 3000 self-mined Bitcoins on hand. 17% of their entire market cap is made up solely from the Bitcoin that they hold. They currently possess $339m in liquid assets + 100m in cash. Out of the 3000 coins that they hold, 1000 of them are held in a Genesis savings account, generating a 4% yield, increasing their generated revenues from Bitcoin appreciation.

HUT has executed on a purchase of $30 million USD of NVIDIA CMPs, which will be delivered starting in May 2021, with full deployment expected to be completed this summer.

The addition of the NVIDIA CMPs is set to dramatically increase Hut 8’s aggregate operating rate by approximately 1600 Gigahash. Hut 8 will use the NVIDIA CMPs to mine alternative blockchain networks (such as Etherium) and expand its mining business while maintaining the benefit of payouts in Bitcoin.

At current network difficulty rates* this would equal an additional 3.357 Bitcoin per day.