Major Bitcoin miners Hut 8 Mining and U.S. Bitcoin Corp today announced a merger which will bring the two companies together to create a North America crypto mining giant.
Tuesday’s announcement said the move will create Toronto Stock Exchange- and Nasdaq-listed Hut 8 Corp after the all-stock deal.
The new entity will have a market capitalization of $990 million, and shareholders will have equal ownership of the company’s stock.
CEO of Toronto-based Hut 8 Jaime Leverton said in a press release that the move would allow the company to “leverage the significant, unencumbered Bitcoin stack we have HODLed to date.”
The new company will have access to roughly 825 megawatts of “gross energy” across six sites in the U.S. and will use a mix of energy sources, including wind and nuclear.
The move comes as Bitcoin miners increasingly struggle with falling digital asset prices. In December, major miner Core Scientific filed for bankruptcy.
And major miner Greenidge Generation has said their viability is in “substantial doubt.”
Other mining companies are selling their mined Bitcoin to pay off debt.
This is because a fall in the price of the biggest cryptocurrency by market cap has made it harder for firms to make profits—especially with the mining difficulty rising.
When Bitcoin becomes harder to mine, more energy is needed—which means more expensive machines. And when the price of Bitcoin is down, the rewards for miners are lower, meaning less cash to spend on mining technology.
🔔🔔🔔News: Hut 8 and US Bitcoin Corp have announced a merger of equals, expecting to establish a new Hut 8 as a large-scale publicly traded North American Bitcoin miner with diversified fiat revenue streams. 📰Read more: https://t.co/TL0ZHpkKqu 📰
— Hut 8 (@Hut8Mining) February 7, 2023
But despite the industry being tough, it is still profitable, and miners can make rewards if they are not overleveraged and have a low-energy model, according to experts.
Scott Norris, co-founder of Bitcoin miner LSJ Ops, previously told Decrypt that experienced miners “have seen many of these bear markets before and have a model that sustained them through it plus a low energy cost.”
Bitcoin is today priced at $23,012 per coin, according to CoinGecko. Just one year ago, it was valued at $43,910.
Its all-time high was $69,044 in November 2021, but it has come nowhere near touching that level again since then.