Hut 8 announces move to other cryptocurrencies besides bitcoin

By Medicine Hat News on March 27, 2021.

Hut 8 will branch out into mining cryptocurrency other than Bitcoin, the company announced Friday, one day after releasing its financial year-end statements for 2020.

Company CEO Jaime Leverton said the data-processing company with major operations base in Medicine Hat would spend US$30 million on acquiring new computer chips to allow it to expand the type of transactions it performs for fees that would still be paid in Bitcoin, the most popular form of internet commerce.

Work in other sectors of cryptocurrency and various blockchain networks “have never been stronger, opening many possibilities across a variety of industries,” said Leverton in a statement.

The purchase includes NVIDIA equipment, but it is not immediately clear if they are bound for Alberta-based operations or will be dedicated to a new agreement to set up remote processing stations and new natural gas fields in the United States. That endeavour was outlined recently in a preliminary agreement with an alternative power provider.

On Thursday, Hut 8 announced that revenue for the fiscal year of 2020 came in at $40 million, roughly half of 2019 results thanks to a price plunge in bitcoin last spring and technical “halving” of the cryptocurrency.

It has since recovered to reach highs in early 2021, and sat at $53,000 on Friday.

The company’s balance of bitcoin units had grown by 17 per cent between the end of 2020 and March 24, the release stated.

“The global strength of our company and mining operations has enabled us to hold the highest amount of self-mined bitcoin on balance sheet of any publicly traded company in the world despite a difficult year for bitcoin miners across the industry,” said Leverton. “Now, with a new leadership team, increased revenue diversification and one of the largest amounts of installed capacity actively mining during this current period of highly profitable mining economics, I am incredibly optimistic about Hut 8’s prospects for the future.”

Site operating costs for 2020 came in at $39.7 million, with the major expense being power at sites in Drumheller and Medicine Hat.

Net income was $4 million, including a third-party hosting contract initiated last year to diversify revenue stream.