Mining platforms for Bitcoin, Hut 8 and US Bitcoin have agreed to join to better weather the bear market in crypto currencies. Reports (1) indicate that the merger between the two competitors in the North American crypto currency mining industry is an attempt to concentrate resources in the wake of a sharp decrease in the values of the crypto currency sector.
Hut 8 and US Bitcoin Merge to Tide Over the Turbulent Crypto Winter
Hut 8, located in Canada, announced that the boards of both firms had given their consent to a "definitive business combination agreement" to move through with the merger. Hut 8 and US Bitcoin will become subsidiaries of the newly formed firm, known as Hut 8 Corp or "New Hut."
The new business will be headquartered in the United States. In addition, the current shareholders would possess fifty percent of the newly combined company.
After the completion of the transaction, New Hut would be eligible for a dual listing on both the Nasdaq and the Toronto Stock Exchanges.
Jaime Leverton, CEO of Hut 8, made the following statement about the proposed merger, which must first receive regulatory permission from the relevant authorities in both the United States and Canada:
The combination of US Bitcoin's scalable mining sites, fairly sizable hosting biz, and industry-leading controlled infra procedures with Hut 8's operations and maintenance track history and varied revenue streams not only quickens our diversified strategy & positions us for near-term growth but it also creates us as a powerful, U.S.-based player that is prepared and able to capture extra opportunities for the company.
Leverton said that as a result of the merger, Hut 8 would be able to utilize all of the BTC that it has HODLed to this point.
He went on to say that the Canadian crypto currency miner plans to sell the Bitcoin it mines to fund its operational costs while the transition is taking place. In addition, Hut 8 intends to sell Bitcoin from its current holdings and investigate various loan options.
Hut 8 could acquire access to hundreds of megawatts of low-cost electricity due to the merger, while US Bitcoin would obtain a partner with a healthy bank sheet. In addition, New Hut would have access to financial resources spread over six different locations to mine crypto currency and conduct other activities.
The recently established business now has a market valuation of $990 million thanks to these facilities, which are spread over five locations in the New York and the province of Alberta in Canada.
Michael Ho, the co-founder of US Bitcoin and current chief executive officer, expressed his excitement about the merger as follows:
"We have spent considerable time looking for the ideal partner to accompany us on our aggressive growth path, and we are certain that Hut 8 is the company that best meets our needs."
Hut 8 would provide US Bitcoin with secured bridge financing for $6.5 million, pending the execution of the loan documents.
What Other Mergers Possible?
The combination between Hut 8 and US Bitcoin is an important developments in the beleaguered crypto currency market. As digital asset firms strive to maintain their market share, such resource-sharing agreements between businesses could not be the last of their kind.
For example, a second crypto currency company established in Canada called WonderFi revealed in January that it was mulling over the possibility of merging with Coinsquare.
Reports indicate that WonderFi, funded by crypto investor and millionaire Kevin O'Leary, intends to establish itself as a dominant player in the Canadian crypto currency market.