The Supreme Court of British Columbia has officially sanctioned the merger between Canadian Bitcoin mining giant Hut 8 and US Bitcoin (USBTC). Announced initially in February 2023, the union aims to form a new entity, Hut 8 Corporation, colloquially known as “New Hut.” This new venture will be a publicly traded company based in the United States.
Moreover, the merger is set to bolster Bitcoin mining and data center capabilities significantly. Hut 8’s initial statement reveals an impressive 825 MW increase in capacity spread across six distinct locations. Consequently, this expansion is a strategic move to capitalize on the burgeoning demand for Bitcoin mining infrastructure.
However, several conditions still need to be met for the merger to reach its final stage. Besides the British Columbia court’s approval, USBTC shareholders must also give their nod to proceed. Once these conditions are fulfilled, the closing transaction is expected to occur before the end of 2023.
The new entity’s shares will be publicly traded under the HUT ticker on the Nasdaq and Toronto stock exchanges. Shareholders will have the opportunity to acquire New Hut common stock by completing and submitting transmittal letters. Hence, the merger is a strategic alliance and offers a new investment avenue for market participants.
Significantly, Hut 8 has been proactive in scaling its operations. The company recently moved 6,400 ASIC mining rigs from its inactive North Bay plant in Ontario to Texas. This relocation aims to meet the increasing demand for Artificial Intelligence (AI) and High-Performance Computing (HPC). The North Bay plant ceased operations in November 2022 following a legal dispute with third-party energy provider Validus Power over alleged contractual breaches.
Furthermore, Hut 8 has formally partnered with Foundry Digital, the institutional mining and staking division of the Digital Currency Group. Under this agreement, Hut 8’s Ontario data center will offer infrastructural support for specific Foundry business solutions. Since 2020, Foundry’s cryptocurrency mining pool has been utilizing Hut 8’s computing resources.
The merger between Hut 8 and USBTC is a significant milestone in the cryptocurrency mining. With court approval in hand and shareholder consent pending, the new entity, New Hut, is poised to become a formidable player in the market. The merger aims to enhance Bitcoin mining capabilities and offer new investment opportunities while navigating legal complexities and forming strategic partnerships. The closing transaction is eagerly awaited, as it will culminate in a meticulously planned corporate strategy.
