Hut 8 Surpasses $1 Billion in Bitcoin Holdings with Latest Purchase

Bitcoin mining giants are ramping up their investment strategies, solidifying their positions as major players in the cryptocurrency market. Hut 8 and Marathon Digital Holdings (MARA) have collectively acquired billions of dollars in Bitcoin in recent months, leveraging innovative financial tools to bolster their reserves. 

Hut 8 Bolsters Bitcoin Reserve With $100 Million Acquisition, Now Exceeds $1 Billion in Holdings

Hut 8 Mining, one of North America’s largest Bitcoin miners, has made headlines with its latest purchase of 990 Bitcoin (BTC), worth approximately $100 million. The move, announced on Dec. 19, is part of the company’s drive to solidify Bitcoin as a core asset within its treasury strategy. This acquisition pushes Hut 8’s total BTC holdings to a staggering 10,096 Bitcoin, valued at over $1 billion, a significant milestone for the mining giant.

The company revealed that it purchased the Bitcoin at an average price of $101,710 per coin, a substantial premium over current market prices. This decision aligns with Hut 8’s strategy of combining cost-efficient Bitcoin production with opportunistic market purchases to maximize returns. The company emphasized that Bitcoin serves as a reserve asset integral to its financial and operational strategy.

The latest acquisition reflects Hut 8’s long-term vision of establishing a robust digital asset reserve. The company has been raising significant funds to support this effort, including a recently announced $500 million capital initiative aimed at acquiring Bitcoin as a strategic reserve asset. This initiative follows a $250 million stock repurchase and share sale program, which further strengthens the company’s financial position to scale its operations.

Hut 8’s BTC holdings now stand at an average cost of $24,484 per coin, thanks to a combination of mined and purchased Bitcoin. This cost efficiency demonstrates the company’s ability to leverage its mining operations to acquire Bitcoin at a substantial discount compared to market prices.

Hut 8’s move is also part of a growing trend among institutions recognizing Bitcoin as a strategic financial portfolio asset. The increasing adoption of BTC as a reserve asset is gaining momentum, particularly as the United States prepares for a pro-crypto administration under President-elect Donald Trump. 

Operational Expansion and Fleet Upgrades

The newly acquired Bitcoin will also play a pivotal role in Hut 8’s operational expansion. The company plans to use its digital asset reserve to fund a fleet upgrade, enhancing its mining capabilities and reinforcing its position as a leader in the Bitcoin mining sector.

While Hut 8 celebrates its achievements, the company is also navigating legal challenges. On Dec. 2, the company filed a motion to dismiss a class-action lawsuit from shareholders. The lawsuit alleges that Hut 8 overstated the profitability of its acquisition of United States Bitcoin Corp. and concealed operational issues at a Texas facility. The allegations stemmed from a January report by J Capital Research, which Hut 8 has characterized as part of a “short and distort” campaign.

Hut 8 has dismissed the allegations as baseless, asserting that they were part of an effort by J Capital Research to profit from a short position at the expense of ordinary shareholders.

Marathon Digital’s $1.5 Billion Bitcoin Buying Spree Pushes Holdings to Over $4.4 Billion

In other Bitcoin miner news, Marathon Digital Holdings (NASDAQ: MARA), one of the largest publicly traded Bitcoin mining companies, has cemented its position as a leading player in the crypto market with a series of aggressive Bitcoin acquisitions. Over the past two months, the company has spent $1.53 billion to acquire 15,574 Bitcoin, a move financed by the issuance of two convertible notes. These strategic purchases have boosted MARA’s Bitcoin holdings by over 50% this quarter and nearly 200% since the beginning of 2023, bringing its total reserves to 44,394 BTC as of Dec. 18.

To fund this substantial buying spree, MARA raised $1.925 billion through two zero-coupon senior convertible note offerings. The first, announced on Nov. 21, secured $1 billion in notes maturing in 2030, yielding $980 million in net proceeds. These notes carried a conversion price of $25.91 per share, representing a 42.5% premium over the average trading price preceding the announcement. The second offering, disclosed on Dec. 4, raised $850 million in notes maturing in 2031, with $835.1 million in net proceeds. These notes featured a conversion price of $34.58, a 40% premium over the share price on Dec. 2.

MARA allocated $1.53 billion of the proceeds to purchase Bitcoin at an average price of $98,529 per coin. The acquisitions, coupled with a repurchase of $263 million in existing convertible notes due in 2026, are part of the company’s strategy to enhance its Bitcoin treasury while optimizing its financial structure.

MARA’s recent acquisitions represent a significant leap in its Bitcoin holdings, which stood at 26,747 BTC at the end of the third quarter and 15,174 BTC at the close of 2023. With 44,394 BTC now under its control, the company’s Bitcoin treasury is valued at approximately $4.45 billion, based on an average price of $100,000 per BTC.

The company has reaped impressive returns on its Bitcoin holdings, enjoying a yield of 22.5% quarter-to-date and 60.9% year-to-date. MARA’s treasury strategy, which integrates mining profits with opportunistic market purchases, positions the company to benefit from Bitcoin’s potential price appreciation while solidifying its role as a long-term holder of the cryptocurrency.

Strategic Purchases Amid Market Activity

MARA’s buying spree began immediately after the convertible notes were issued. On Nov. 22, the company announced its acquisition of 5,771 BTC at $95,554 per coin. By Nov. 27, it had added another 703 BTC, bringing its holdings to 34,794 BTC. Subsequent purchases saw its treasury reach 40,435 BTC by Dec. 10 and climb further to 44,394 BTC by mid-December.

Marathon Digital is not alone in its bullish stance. In December, other prominent Bitcoin miners also made significant acquisitions. Hut 8 purchased 990 BTC, while Riot Platforms bought $510 million worth of Bitcoin following a bond issuance. CleanSpark, meanwhile, raised $500 million through a convertible note offering but indicated no plans to acquire Bitcoin with the funds.

Marathon Digital’s aggressive acquisitions reflect its belief in Bitcoin’s long-term value as a reserve asset and a strategic financial instrument. The company’s CEO has previously highlighted its focus on integrating advanced financial tools with its core mining operations to maximize returns. By leveraging convertible notes and mining revenue, MARA is building a treasury model that not only supports operational expansion but also positions the company as a significant institutional holder of Bitcoin.

The decision to issue zero-coupon notes with generous conversion premiums suggests the company is confident in its stock’s future performance. It also highlights the growing trend of Bitcoin miners leveraging financial instruments to strengthen their balance sheets and fund strategic initiatives.

MARA’s actions align with a broader institutional trend of increasing Bitcoin adoption as a reserve asset. As Bitcoin’s role in global financial markets expands, companies are recognizing its potential as a hedge against inflation and a store of value. With institutional interest continuing to grow, Marathon Digital’s strategic moves may serve as a blueprint for other companies looking to capitalize on Bitcoin’s rising prominence.