Hut 8 CEO Asher Genut does not foresee a repeat of 2022’s wave of bankruptcies among mining companies in the near future. He made this statement in an interview with Bloomberg.
According to him, the primary financial issues for miners at that time were linked to excessive debt and unpreparedness for rising electricity prices.
In 2021, industry companies actively took on loans, allowing many to expand rapidly. The subsequent decline in cryptocurrency prices and increase in energy tariffs deprived firms of the ability to effectively repay debts, the expert noted.
In 2022, major industry players such as Compute North, Celsius Mining, and Core Scientific filed for bankruptcy. The latter completed its reorganization process in early 2024 and has since returned to the Nasdaq listing.
Genut emphasized that since then, bitcoin miners have generally relied less on leverage and have increasingly sought equity financing to develop their businesses.
The Hut 8 chief anticipates a rise in merger and acquisition activity among smaller industry enterprises. He predicts this will also help reduce bankruptcy risks.
After the halving, investors will be interested in “large operators with the lowest production costs,” Genut added.
He noted that he chose a similar path when, in February 2023, he initiated the merger of US Bitcoin, which he founded, with the then Canadian Hut 8 Mining. The partners completed the process in December.
The merged company is based in Florida. In February 2024, Hut 8 began construction of a 63 MW mining data center in Texas.
In March, bitcoin miners earned over $2 billion, setting a new historical record.