TLDR; Bitcoin is taking the world by storm. Crypto miner stock in Canada with a solid management team and heavily discounted compared to peers is Uplisting. HUT 8 (OTC ticker: HUTMF, TSX: HUT.TO) will profit.
HUT 8 will have explosive growth in the coming days and months. Hut 8 is a crypto mining company in Canada which just got approved for a NASDAQ uplisting today!
With Bitcoin becoming legal tender in El Salvador and on track to become legal in other countries (Paraguay coming soon), this is the beginning of mass adoption. First by countries who have been decimated by the US Dollar, then by the bigger countries. There's a reason the US and China are spreading FUD about Bitcoin and coincidently release coins they control. They want 100% control of the monetary supply, at the expense of the population.
This is the beginning of a revolution and we are living in it.
Obviously, with mass adoption, the price will increase as people begin to realize the legitimacy and buy more BTC. First it becomes an accepted standard store of value and then it becomes a medium of exchange. Crypto miners, especially those that hodl their BTC, which Hut 8 does, are going to reap significant rewards.
Comparing Hut 8 to two other miners who are listed on US exchanges, there's a significant value gap.
Hut 8 (HUTMF) vs. Crypto Miners that trade on NASDAQ
| Hut 8 | RIOT | MARA | |
|---|---|---|---|
| Share Price (USD) | 4.05 | 31.41 | 26.14 |
| Market Cap (USD) | 486.14M | 3.014B | 2.60B |
| Trailing P/E | 7.87 | 21.97 (forward P/E) | 36.36 |
| Gross Profit (Q1 2021) | 12,130 | 15,663 | -45,659 |
| BTC on Balance Sheet (Q1 2021) | 3,271 | 1,771 | 5,324* |
\MARA purchased ~4,800 BTC for $150 Million to bolster their holdings, but it has also hurt their balance sheet for the time being.*
There are many other crypto miners out there, but these are the big ones that I'm going to compare. Hut has hodl'd pretty much all the BTC they've mined from the get go. They insist on keeping BTC on the balance sheet and using it as leverage to generate fiat to pay for expenses.
Hut 8 has a solid balance sheet and is garnering institutional interest as they strive to be ESG compliant. They recently signed a deal to capture wasted energy with Validus Power to power their rig and hired a head of sustainability who's responsible for meeting institutional ESG standards. Once that happens and institutions are on board, money will flow in. Kevin O'Leary mentioned Hut 8 (go to 17:30 on the link) the other day. It's on their radar.
Hut's diversification of their revenue streams is also noteworthy. Not only are they mining BTC, but they are mining Ethereum using their new NVIDIA CMPs which are expected to be fully deployed by August 2021. Their payout will be in BTC and with the current difficulty rates, this will result in 3.357 BTC mined per day. They also are getting into hosting in order to further diversify revenue streams.
China's ban on crypto miners using non-renewable energy in various provinces has lowered the network difficulty, meaning that companies like Hut will be able to mine more BTC per day than they estimated previously. Below, you can see a 16% decrease in difficulty and an additional estimated 5.6% drop next (source).
From Hut themselves: "Our philosophy is regular equipment refresh cycle; Avoid chasing giant capital balloons to roll over entire fleet; Refresh 25% every 6-12 months based on Bitcoin economics" (Link). This ensures they have optionality in the market as new, more efficient equipment gets released.
One final point is about the price of BTC. If BTC were to hit $100k USD, which many analysts have predicted, then Hut 8's bitcoin holdings (as of March 31 - it's more now) would be just under 70% of their entire market cap. Excluding cash, plant and equipment value and other assets. For a bullish scenario, it is way undervalued.
Simply by being uplisted, I think that will close some of the gap we see. In fact, I think that Hut's methodical approach is one of the best out there and with time, rewards will be reaped.
Full Disclosure: I own shares of HUTMF.
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