Hut 8 Taps into Bitcoin Reserves for New 62MW Site Buildout

Hut 8 is set to make use of the 9,000 bitcoin on its balance sheet to fund its near-term growth, including a plan to build a new 63-megawatt (MW) site in Texas.

The company announced on Tuesday that it has started the construction of a new site in Culberson County, Texas, which it expects to begin energizing miners in Q2.

Hut 8 claims that the estimated cost would be $275,000 per MW, implying a total capital expenditure of $17.3 million for the construction buildout.

Hut 8 said it has officially enacted a new treasury strategy to make use of its bitcoin reserves to finance growth initiatives through “direct sales, option strategies or other approaches.” Hut 8 has previously secured a debt facility with Coinbase by pledging bitcoin as collateral.

As of the end of January, Hut 8 was holding 9,116 BTC on its balance sheet, now worth about $515 million with bitcoin’s recent rally that has surged to new yearly highs of over $57,000. The company did not specify how it will utilize the bitcoin reserves exactly to fund the Culberson site buildout.

However, the site expansion does not necessarily mean hashrate growth as Hut 8 said it may use the facility to transition the proprietary hashrate currently located in Granbury, Texas, and Kearney, Nebraska, which is set to be moved out.

As previously reported, Hut 8’s merger partner USBTC was hired to manage the operations of the Granbury and Kearney sites for Generate Capital.

After completing the merger with USBTC, Hut 8 continued to manage the two sites until Generate Capital sold the infrastructure to Marathon Digital, which is set to pay $13.5 million to accelerate the full control of the two sites.