Hut 8 Mining’s Merger with USBTC Expected to Fuel Growth, Say Canaccord Genuity Analysts

Canaccord Genuity analysts are optimistic about the merger between cryptocurrency miners Hut 8 and USBTC, considering it a significant catalyst for Hut 8’s growth. The deal, providing equal equity to both companies, offers substantial advantages to Hut 8, reported Proactiveinvestors.

The predict that the merged entity will have a self-mining capacity exceeding 7 exahash (EH/s). Moreover, the acquisition will significantly increase Hut 8’s use of green energy in the US. Hut 8’s decision to re-domicile in the US will also enhance its access to broader capital markets by listing on Nasdaq.

Addressing Hut 8’s Q1 results, the analysts noted that the company’s focus on its balance sheet helped power fluctuation issues at the Drumheller site, which resulted in reduced output. They expect these problems to be resolved in the coming month without significant loss of crypto mining rigs.

The analysts also highlighted the current windfall for Hut 8 and other crypto mining companies due to the surging demand for Bitcoin blockspace, driven by the introduction of inscriptions, a form of Bitcoin NFT.

Based on these factors, the analysts maintain their ‘Buy’ rating on Hut 8 but have revised the price target from $5 to $3. They anticipate that the upcoming merger with USBTC, which is expected to double the hashrate and improve margins significantly, will be a strong positive driver for the stock.