In a big move that could shake up the crypto world, Hut 8, a U.S.-based Bitcoin mining company, has taken an 80% stake in American Bitcoin, a company backed by none other than Donald Trump’s sons, Eric and Donald Trump Jr. This partnership is a strategic game-changer that’s already making waves in the crypto and investment communities.
Why It’s a Big Deal
The deal makes a lot of sense for Hut 8 and its investors. Here’s why: By joining forces with American Bitcoin, Hut 8 plans to reduce its costs and boost its valuation. For Hut 8, this means lower capital expenses and more steady revenue streams that are based on fiat (traditional money), rather than relying only on the volatile price of Bitcoin.
The long-term vision is clear: Hut 8 and American Bitcoin will function as “two sister publicly traded companies” working under one umbrella. This could create a more stable business model while still keeping exposure to the ups and downs of Bitcoin’s value.
What’s Next for American Bitcoin?
American Bitcoin, which was previously known as American Data Centers, has some big plans. They want to grow their mining capacity five times over—from 10 EH/s to over 50 EH/s. This expansion will also focus on improving energy efficiency, which is key for long-term sustainability. Hut 8 might even help host some of these mining operations, opening up more opportunities for both companies.
The Impact on Hut 8’s Stock
Hut 8’s stock has already seen a bump of about 6% following the announcement, trading at around $13.33 per share. This is a welcome move for investors, though shares are still down nearly 40% from their highs after the 2020 elections. Analysts at Benchmark believe Hut 8 is currently undervalued, especially when you consider that nearly 71% of its market cap is tied to its Bitcoin holdings.
What’s in it for Investors?
For investors, this deal signals big potential upside. Hut 8 could see its stock rise as it moves away from the unpredictable nature of Bitcoin mining alone and towards a more diversified business model. The plan is to lower capital costs while keeping some of that Bitcoin exposure. Hut 8’s current Bitcoin stash (over 10,000 BTC) will also play a key role in funding future growth.
In short, this partnership could make Hut 8 a much more attractive investment in the long run, as it shifts into a more stable business model while still riding the Bitcoin wave. If you’re watching the crypto market, this could be the beginning of something huge for Hut 8 and its investors.
