Bitcoin miner Hut 8 confirmed a $500 million raise to purchase BTC and up to $250 million share repurchase.
Hut 8, a prominent publicly traded Bitcoin mining company, has announced that it plans to raise a massive $500 million and use the funds to purchase BTC as a strategic reserve asset, setting a new bar for digital asset adoption. The company unveiled three major developments while its shares traded at $25.18 at the time of writing, showing signs of a price increase.
According to the announcement, Hut 8 debuted an “at-the-market” (ATM) equity offering program along with a stock repurchase program and also submitted a shelf registration statement with the United States Securities and Exchange Commission (SEC). The ATM program allows Hut 8 to offer common shares of up to $500 million via sales on the Nasdaq Global Select Market and other methods.
The proceeds from the offering will then be directed to the growth of Hut 8, which includes initiatives such as infrastructure development and Bitcoin BTC $114 425 24h volatility: 0.5% Market cap: $2.28 T Vol. 24h: $25.34 B purchase.
The $250 million stock repurchase program allows the Bitcoin miner to purchase up to 5% or 4.68 million shares of the outstanding stock over the next year. It is important to note that these purchases will be carried out at market prices, said Hut 8, after securing the approval of Coatue Tactical Solutions in line with their convertible note agreement.
Hut 8 filed the Form S-3ASR registration with the SEC, which ensures its compliance with the regional laws of the US and Canada. Interestingly, these two programs are based on the Bitcoin miner’s will as it retains flexibility to adjust its decisions in accordance with market conditions, stock prices, and liquidity.
Bitcoin miners and rivals to Hut 8, Riot Platforms and MARA Holdings hold 8,490 BTC and 26,842 BTC, respectively. Meanwhile, Hut 8 has 9,102 BTC, according to CoinGecko data.
Bitcoin as a Strategic Reserve Asset
The inclusion of Bitcoin as a strategic reserve asset shows that Hut 8 is a firm believer in the long-term potential of the world’s largest digital asset. While governments and companies hold gold as a reserve asset, the addition of Bitcoin (BTC) in the same standards establishes its dominance as the “digital gold” and a store of value.
Bitcoin is also considered a hedge against inflation and currency devaluation. Hut 8’s decision further solidifies the bullish fundamentals behind BTC and puts the miner in the list of MicroStrategy, Tesla, and other companies that hold the leading virtual currency. However, considering BTC’s volatility, this decision could also have side effects, and this is where Hut 8’s flexibility over the decision comes into effect.
Moreover, the Donald Trump administration is also considering the addition of Bitcoin as a strategic reserve asset, which, if implemented in reality, would easily push the leading digital asset above the $100,000 price level.
Notably, pro-crypto Republican Senator Cynthia Lummis recently introduced the “Bitcoin Act of 2024,” which requires the US Treasury and the Federal Reserve to purchase 200,000 bitcoins every year for the next five years until the total holding reaches 1 million coins. Also, as per earlier reports, a massive ten states under US jurisdiction have confirmed the introduction of legislation to implement the strategic Bitcoin reserves.
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