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Hut 8 Mining will unlock the $50 million credit facility from Coinbase at different stages of closing and the progress made ahead.
In an official announcement on Monday, June 26, Hut 8 Mining – one of the biggest public-listed crypto miners – said that it has secured $50 million in credit facility from Coinbase Global to fund its operations.
This also includes the closing of a highly anticipated merger with peer firm US Bitcoin Corp (USBTC). This development comes just one year ahead as miners gear up for the Bitcoin halving 2024 event. The Bitcoin halving event will cut miners’ token rewards to half from 6.25 to 3.125 Bitcoin.
Hut 8 Mining Corp noted that the Credit Facility from Coinbase provides a $15 million term loan. This is likely to be funded in a very short period of time after funding. The Credit Facility will also have an option of drawing an additional US$20 million within one or two months following the closing.
Similarly, the third borrowing will provide an additional $15 million delayed-draw term loan just 15 days after the completion of the merger between Hut 8 Mining and US Data Mining Group, Inc. Speaking on the development, Hut 8 Mining Corp. CEO Jaime Leverton said:
“This credit facility gives us additional financial flexibility. At the same time, it ensures that we can maintain our dynamic Bitcoin treasury management strategy going into the halving.”
Hut 8, unlike many other bitcoin miners, has chosen to hold onto the coins they mine despite the market downturn last year. This approach allows them to act as proxies for Bitcoin and appeals to investors who want exposure to the digital asset in the stock market. However, this strategy also means that the miners need to find additional sources of cash as they are not selling their Bitcoin holdings.
Bitcoin Miners in Good Health
After the brutal crypto winter of 2022, Bitcoin miners have seen a strong recovery this year along with the recovery in the BTC price. The Bitcoin hash rate has ticked up significantly adding up to the miner revenues.
On the other hand, the launch of the BRC20 standard this year has also contributed significantly to miner revenues. As the Bitcoin network faced some congestion, miners made a hefty revenue.
Ahead of Bitcoin halving next year, some of the biggest Bitcoin miners have already begun the preparations. Riot, a leading mining company in North America, has revealed its acquisition of 33,280 state-of-the-art Bitcoin mining machines from MicroBT. The machines, valued at $162.9 million, will be manufactured in Pittsburgh, Pennsylvania, USA. MicroBT, based in Shenzhen, China, is the second-largest producer of Bitcoin mining machines globally.