Key Points
- Hut 8, a leading bitcoin miner, has secured a power purchase agreement for a site in West Texas, allowing access to 205 megawatts of power.
- The deal will increase Hut 8’s total capacity to approximately 1.3 gigawatts across all its services.
Hut 8, a leading player in the bitcoin mining industry, has successfully secured a power purchase agreement for a site in West Texas.
This marks a significant achievement following the halving event in April. The agreement gives the mining company access to 205 megawatts of power capacity, which is available for immediate use.
Hut 8’s Development Pipeline
This power deal is a part of Hut 8’s broader development strategy, which includes an exclusive energy capacity of 1,100 megawatts.
The mining site is strategically located near a wind farm and connected to the ERCOT grid. This location gives Hut 8 access to some of the most affordable wholesale power in North America, which will enhance its bitcoin mining and artificial intelligence (AI) projects.
The mining company has already begun data center engineering, procurement, and construction to utilize this new power source.
The company’s press release states that the approval of such a large data center load under the complex regulatory framework is a first of its kind. Asher Genoot, CEO of the mining company, shared his thoughts on the development:
“[The purchase approval] is a testament to the expertise, diligence, and creativity of our corporate development organization, who negotiated a bespoke structure to address the nuanced commercial, legal, and regulatory challenges of each stakeholder in the project.”
Once the deal is finalized, Hut 8’s total capacity will increase to around 1.3 gigawatts across its owned and managed services.
Expansion of Hut 8
The agreement comes at a time when Bitcoin miners’ revenue has significantly decreased since the halving in April. However, public miners like Hut 8, with robust balance sheets, are seizing market share opportunities as less efficient miners leave the industry. Genoot expressed optimism about the future, stating:
“We continue to identify opportunities to work hand-in-hand with energy partners to develop bespoke structures that generate outsized value for every party involved.”
In June, Hut 8 secured $150 million from technology investment platform Coatue to support the buildout of its AI infrastructure. The company aims to commercialize its AI vertical, with revenue expected in the second half of 2024.
Hut 8’s share price closed up 6% on Monday at $17.48 and is currently up 2% in pre-market trading. Amid the company’s continuous expansion, the stock has gained 65% over the past month.
Texas as a Mining Hub
Texas has quickly become a hub for Bitcoin miners, particularly after China banned mining operations in 2021. Major mining companies, including Marathon Digital and Riot Blockchain, have expanded their operations in the region in recent years.
Hut 8’s latest power purchase agreement in West Texas is a significant step forward, positioning the company for continued growth amid rough market terrain.
