Hut 8 closed its debt early with Anchorage Digital as it makes strides in expanding into the AI and HPC industries.
Miami-based Bitcoin mining firm Hut 8 paid off its $38 million outstanding debt balance to Anchorage Digital early via a stock conversion. The debt repayment included Anchorage converting the debt for $16.395 per share of Hut 8’s common stock.
The price conversion represents a 51% premium to the 20-day volume weighted average price (VWAP) through September 26, 2024. “Upon completion of the Conversion, the outstanding loan and all other related obligations of the Company and its subsidiaries have been satisfied,” a release issued by Hut 8 read.
“Hut 8 stands out for its conviction to innovation — it’s a key reason that we originally backed them with a loan, and it’s the same reason we’ve now converted that debt to equity,” said Anchorage Digital’s Nathan McCauley. Hut 8’s CEO Asher Genoot mentioned, “With a strengthened balance sheet and decreased leverage, we believe we are even better positioned to advance discussions with prospective counterparties and execute on the development of next-generation mining and AI data centers.”
Hut 8 is Strategically Diversifying Into the AI and HPC Spaces
Beyond the debt it just repaid, the miner also secured a $150 million loan from Coatue Management in June, offered at an interest rate of 8% and a conversion rate of $16.395 per share. The funds are to be used for Hut 8’s diversification plans.
Hut 8, like other miners, is venturing into new territories due to the reduced block rewards after this year’s Bitcoin Halving. With the growth of the AI industry and a strong need to power high-performance computing (HPC) use cases, miners have begun offering services to firms in these fields. To that end, Hut 8 launched its GPU-as-a-service program on September 26, diversifying its reach to power AI and HPC firms.
Genoot mentioned, “Consistent with our commitment to disciplined capital allocation, we believe a thoughtfully structured AI compute business will be accretive both financially and strategically and drive topline growth, revenue diversification, and long-term value creation.” Hut 8 offers Hewlett Packard Enterprise (HPE) Cray supercomputers fueled by 1,000 NVIDIA H100 GPUs.
The miner boasts five HPC data centers in the Canadian provinces of British Columbia and Ontario while possessing four power generation facilities in the latter province. It also has Bitcoin mining facilities in Alberta, New York, and Texas.
