Hut 8 merger would’ve happened even without FTX or crypto turmoil, says CEO

According to Hut 8 CEO Jamie Leverton, the collapse of the FTX cryptocurrency exchange and the general turmoil in the cryptocurrency market were not key factors in the decision to merge cryptocurrency mining company Hut 8 with US Bitcoin Corp.

February 8 Leverton said that the merger was primarily intended to provide diversified revenue and help scale the combined business, stating:

“I think this deal would have gone through anyway. We believe the opportunity to bring these businesses together is incredibly complementary.”

The all-stock merger was announced on February 7, with the combined company, now Hut 8 Corp. or New Hut, will be based primarily in the United States rather than Canada.

Regarding the FTX crash in November, Leverton said fears are “starting to die down a bit” and interest in the crypto industry is returning.

She added, “I think we’re seeing a return of a lot of interest in this space, we’re seeing a significant appreciation for this space in 2023.”

The merger of the two mining companies “will provide incredible scale,” she continued, adding that there will be “diversified revenue programs,” which is a good strategy for both companies individually.

New Hut will reportedly have access to approximately 825 megawatts at six sites in New York, Texas and Alberta in Canada. Its total aggregate mining power will be 5.6 exahashes per second (EH/s).

Commenting on the choice of location, Leverton said it was in the best interest of businesses to have a “diversified geography”, adding:

“One of the benefits here is [that the merger is] giving us this geographic diversification. There is uncertainty in the regulatory environment on both sides of the border.”

Hut 8 has a mining facility in North Bay, Ontario, however operations have been suspended due to ongoing litigation with the energy supplier.

The U.S. Bitcoin facility in Niagara has issues of its own due to an ongoing dispute with the City of Niagara Falls over noise complaints from residents.

The firm provided more details about the merger in a Feb. 8 presentation. The deal is expected to close in the second quarter of 2023, subject to shareholder, regulatory and stock exchange approval.

Earlier this week, Leverton said the firm plans to cover its operating expenses during the interim period by selling the bitcoins it mines and exploring various debt options.

Bitcoin Miner Hut 8 Sues Ontario Electricity Supplier

Hut 8 shares fell 8% on the day the merger was announced. In addition, according to market watch, Hut shares fell 1.2% on the day to $2.12 after hours. The stock is currently trading 86% below its November 2021 all-time high of $15.28.

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