Hut8, one of the largest BTC miners in the world based out of Canada, was forced to shut down after their energy provider, Validus, pulled the plug on their Ontario facility. There’s been a bit of public back and forth, Validus claims they’re not getting consistent payment from Hut8, while Hut8 denies that. Hut8 also has claimed that Validus is not fulfilling their energy delivery obligations.
This site accounts for roughly 20% of Hut8’s operations. While this sounds bad, it may actually help Hut8’s bottom line. Bitcoin is currently not profitable to mine for most, and Hut8’s financial statements have been taking a beating the past few quarters. Their revenue was down 36% in the third quarter, they saw a >70% decline in mining profits, and Bitcoin has dropped to nearly a quarter of what it was worth this time last year.
Hut8 is a sizable mining operation and a publicly traded company with a market cap of $220M. That being said, the company was worth almost $2B last year. One of the strangest moves by the company was their public pledge to hold all of its Bitcoin regardless of what happened in the public markets. One has to question how a public company thinks hodl’ing indefinitely is a reasonable treasury management plan, but I guess they know more about the BTC mining business than I do.
Hut8 isn’t the only mining company struggling. BTC miner Core Scientific is still teetering on the brink of bankruptcy. Core Scientific is massive, contributing roughly 10% of the entire Bitcoin network’s hashrate. With news like this floating around, it’s reasonable to start questioning the security and future of the Bitcoin network.