Hut 8 Mining, a Toronto-based Bitcoin miner, reported a sharp drop in its first-quarter revenue to C$19 million ($14.16 million) due to several difficulties in its operations. This was a larger-than-estimated 64% decline from the same quarter a year ago and 13% lower than the previous quarter.
Its earnings per share, however, was higher than the estimations on FactSet; at a reported 47 U.S. cents. Furthermore, Hut 8's stock displayed little change during pre-market trading down 0.55% and over doubled in price during the current year even though there was a YoY drop of 34%.
The crypto mining industry is still struggling to recover from the crypto winter; a difficult period for the sector that saw major companies like Compute North and Core Scientific file for chapter 11 bankruptcy.
Hut 8 was affected as it had to turn off around 8,000 machines in its Ontario facility following a disagreement with the energy provider in mid-November and only managed to bring 1,000 back online since then.
In addition, its managing facility in Drumheller, Alberta, is operating at 15% capacity due to electrical problems that has caused damage to its equipment. This site accounts for approximately 0.9 EH/s of Hut 8’s total computing power of 2.6 EH/s.
The company is now in the process of merging with U.S. Bitcoin Corp., a private miner with operations in both New York and Texas.
The crypto mining industry has seen a rapid decline since Bitcoin's all-time high in December 2017, with a long winter ahead until recently; this winter has included a 64% decline in revenue for Hut 8 Mining in the first quarter of 2021. Since then, Hut 8 has faced numerous difficulties including a dispute with an energy provider and electrical problems at the Drumheller facility.
Fortunately, the markets have responded positively and Hut 8 stock has nearly doubled in price thus far in the year even though there is a year-on-year drop of 34%. The company is now hoping to revive its operations with a merger with U.S. Bitcoin Corp. but only time will tell if this, combined with other efforts, will be successful in saving Hut 8 from a crypto winter.
Wyatt Alvarez
- 2023-05-11
Hut 8's #CryptoWinter Struggle - Can a Merge Save Them?
Struggling to survive the crypto winter, Hut 8 Mining has seen a 64% decline in their first quarter 2021 revenue due to operational difficulties. With stock prices nearly doubling against a 34% year-on-year decline, Hut 8 is now looking to merge with U.S. Bitcoin Corp. as a potential solution.
