Bitcoin Miner Borrows $50 Million From Coinbase To Bolster Treasury

Like everything else in crypto last year, miners got absolutely crushed.

The combination of high energy prices, increasing competition for Bitcoin blocks, and the bear market proved to be too much for many miners. No miner was safe, not even the giants like the now-bankrupt Core Scientific.

However, 2023 has proven to be much more fruitful for miners. Perhaps nowhere is that more true than for the mining corporation Hut 8 (HUT). Their stock is up a massive 260% so far this year and they are working on a highly anticipated merger with fellow mining corporation US Bitcoin Corp.

Now, although the stock has been doing well this year, it is still down more than 80% from the all time highs.

Power & equipment cost increases… huge levels of debt… and increasing competition have been a weight on recovery.

But while other miners have had to sell more BTC than they mine in order to cover their costs, Hut 8 has been one of only a few that have attempted to hold the coins they mine through the bear market – all 9,000+ of them.

Enter, the $50 million loan from Coinbase.

Hut 8 believes that by holding so much BTC on its balance sheet, it is better able to attract investors who want exposure to hedged miners. They also just fundamentally believe in BTC as an asset class.

Looking Ahead

With the Bitcoin halving (and corresponding mining difficulty boost) rapidly approaching, mining firms like Hut 8, are scrambling to improve their capabilities.

In order for Hut 8 to successfully continue operations without having to liquidate their crypto treasury, they needed a partner to support them. And who better than Coinbase, who is making a concerted effort to enter the institutional arena.