Hut 8 is planning a significant overhaul that has the potential to transform its future in both energy infrastructure and bitcoin mining. The Canadian company said that it will spin out the majority of its bitcoin mining activity into a new company, American Bitcoin (ABTC), within the next week.
The expansion is accompanied by aggressive growth plans. Hut 8 announced it is building 1.53 gigawatts (GW) of further capacity at four U.S. locations in Louisiana, Texas, and Illinois. When finished, the projects will increase the company’s power in management more than two times to 2.55 GW.
Benchmark analyst Mark Palmer called the update a turning point and lifted his price target on Hut 8 shares to $36 from $33 and holds a buy rating. With the shares closing just shy of $26 yesterday, that means nearly 40% potential gain.
Palmer underscored that spinning off the mining business into ABTC enables Hut 8 to position itself as an energy infrastructure company, de-risking exposure to Bitcoin volatility while enabling the access to lower-cost financing.
Supported by $2.4 billion liquidity, including reserves of bitcoin, credit facilities, and an equity program, Hut 8 is positioning itself as a proxy for bitcoin as well as a major player in AI and high-performance computing infrastructure.
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