Bitcoin Miner Hut 8 Secures $50M Credit Facility from Coinbase

The Canadian Bitcoin mining firm, Hut 8, has secured a $50 million credit facility from Coinbase Credit, a subsidiary of the US-based cryptocurrency exchange, Coinbase. The facility will be used for general corporate purposes and will be backed by bitcoins held by the exchange.

Hut 8 announced the development today (Monday), noting that the agreement involves its subsidiary, Hut 8 Holdings, as the borrower.

Hut 8’s New Credit Facility

According to the statement, the facility comprises a $15 million term loan expected to be funded at or after closing the deal. Moreover, the credit facility provides an option to get an additional $20 million in delayed draw term loan tranche in a second borrowing between one and two months after the deal has been closed.

Furthermore, Hut 8 has the option of accessing an additional $15 million delayed draw term loan tranche in a third borrowing within 15 business days after the completion of the previously announced merger between Hut 8 and US Data Mining Group, also known as US Bitcoin.

Hut 8 and US Bitcoin merged in February in a deal that resulted in one of the largest North American crypto mining companies. After the merger, the new mining entity is now among the largest miners in the region in terms of hash rate, sharing the top spot with firms, such as Marathon Digital and Riot Blockchain, according to a filing with the SEC.

Ahead of Bitcoin Halving

Hut 8’s Chief Executive Officer, Jaime Leverton, said the credit facility gives the mining firm "additional financial flexibility."

"At the same time, it ensures that we can maintain our dynamic Bitcoin treasury management strategy going into the halving," she added. Bitcoin halving is an anticipated event that will reduce the rewards given to miners by half.

Bitcoin miners were most recently affected by crypto winter, which was characterized by low prices for digital assets and the collapse of major cryptocurrency companies. One of the miners, Core Scientific, filed for bankruptcy last December and recently filed a chapter 11 plan.

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