Hut 8 has begun constructing its new 63-megawatt crypto mining site in Texas.
Hut 8, a digital asset mining company offering hosting services for other miners by providing infrastructure and technical expertise to help them operate their mining rigs, has started construction on their new 63MW crypto mining site in Texas.
It is also estimated, though not verified, that the construction on this new site will cost 40% less compared to other locations of similar nature, which would be comparable in terms of factors such as climate, regulatory environment, infrastructure availability, and other relevant considerations.
The construction of the new mining facility has started in Culberson County, Texas, which increases the company’s total number of mining facilities in the United States to five. The firm has estimated that the new facility will be open for business for miners by the second quarter (Q2) of 2024.
What is so interesting about this latest site is that Hut8 believes that the cost to mine Bitcoin here will be considerably less than it presently costs at its other sites in Nebraska and Texas. According to the statement given by Hut8 in a press release, they believe that they will be able to mine at a rate 30% lower than what it costs to mine at its other sites.
The CEO of Hut 8, Asher Genoot, has stated that the cost of setting up the new facility is considerably lower if you compare it to other projects of similar nature and capacity.
In contrast to the typical cost of about $460,000 per megawatt (MW) for recent regional acquisitions, he anticipates the company’s expenses for designing and constructing the Culberson County site will be under $275,000 per MW.
The figure translates to a savings of over 40%, or roughly $18.5 million in initial development expenses for every 100 MW of expansion.
Genoot’s statement read: “Compared to the benchmark of approximately $460,000 per MW set by recent acquisitions in the area, our all-in cost to design and build the Culberson County site is expected to be less than $275,000 per MW. This represents more than 40% savings or approximately $18,500,000 upfront development costs per every 100 MW expansion.”
As per information from crypto news websites Cointelegraph, the Canadian company, and US Bitcoin Corp. merged in December 2023 to establish a new entity. Following the merger valued at $725 million, the combined company restarted its activities under Hut 8. It shifted its headquarters to Miami, Florida, becoming a corporation based in the United States.
Before merging with Hut 8, US Bitcoin Corp. (USBC) was a leading North American Bitcoin mining industry player. It owned and operated four Bitcoin mining centers strategically located across the United States, where it made commendable efforts to use various renewable energy sources it had at its disposal.
The company aimed to optimize efficiency and minimize operational costs to generate profitable Bitcoin mining operations. After merging with Hut 8, the combined entity aimed to strengthen its position in the digital asset mining space, leveraging both companies’ combined expertise and resources.
However, Hut 8’s effort to strive for expansion has come at a difficult time for the firm as it was recently excused of orchestrating a pump-and-dump scheme by JCapital Research.
A pump-and-dump scheme is a type of financial fraud where individuals or groups artificially inflate the price of a stock, cryptocurrency, or other asset through false or misleading statements, creating hype and attracting investors.
Once the price has risen significantly, the parties involved in the scheme sell off their holdings at a profit, causing the price to plummet and leaving other investors with losses.
Essentially, it involves pumping up the value of an asset through deceptive means and then quickly dumping it for profit before the price collapses.
JCapital Research is a stock research firm that focuses on short-selling. They analyze companies and publish reports highlighting potential issues or concerns they identify.
Short-selling involves borrowing shares of a company and then selling them in the hope that the price will go down. If the price does fall, the short seller can repurchase the shares at a lower price, return them to the lender, and pocket the difference as profit.
Hut 8 responded to JCapital’s accusations by criticizing them as a biased group with a vested interest in seeing the company’s share price fall.
However, even if you put aside the accusations the firm got from JCapital, it is still involved in facing other legal battles, which doesn’t bode well for the overall image of Hut 8.
The company is currently facing legal troubles in the form of a class-action lawsuit. The lawsuit alleges that Hut 8 made deceptive statements and failed to disclose important information regarding US Bitcoin Corp’s operations, including the involvement of a significant shareholder who wasn’t disclosed, historical issues with the core asset’s ability to provide energy and internet, and the overstating of profitability for certain assets belonging to US Bitcoin Corp.
