The Canadian Bitcoin (BTC) mining company, Hut 8 Mining, has secured a credit facility from a subsidiary of the United States-based cryptocurrency exchange, Coinbase.
Hut 8 officially announced on June 26 that it entered a $50 million credit agreement with Coinbase Credit. The credit facility involved Hut 8’s subsidiary, Hut 8 Holdings, as the borrower.
According to the announcement, the loan proceeds will be used for general corporate purposes. The credit facility provides a $15 million term loan that is expected to be funded at or subsequently after closing.
The loan provides an option of getting an additional $20 million delayed-draw term loan tranche in a second borrowing between one and two months following closing. The facility also offers a third option of drawing an additional $15 million delayed-draw term loan tranche.
The last tranche would be the third borrowing provided within 15 business days following the completion of the previously announced merger between Hut 8 and U.S. Data Mining Group, also known as US Bitcoin, the announcement notes.
According to Hut 8 CEO Jaime Leverton, the credit facility provides the firm with additional financial flexibility. He mentioned the importance of the credit facility in the context of the upcoming Bitcoin halving, which is set to reduce the BTC miner block reward from 6.25 BTC to 3.125 BTC.
Leverton stated:
“At the same time, it ensures that we can maintain our dynamic Bitcoin treasury management strategy going into the halving.“
Hut 8 has emerged as a major Bitcoin miner that continued to hodl BTC despite massive financial issues faced by the BTC mining industry. While some mining firms like Argo Blockchain were forced to sell portions of their BTC holdings amid the bear market of 2022, Hut 8 has remained true to its “long-standing HODL strategy.”
Related: Bitcoin miner Core Scientific files its Chapter 11 plan
The Canadian firm held a total of 9,133 self-mined Bitcoin held in custody as of March 31, 2023, Hut 8 wrote in its Q1 2023 financial update. “Leading up to the halving, we will continue to focus on strategically increasing our stack of Bitcoin and growing our HPC business including exploring opportunities in the growing artificial intelligence market,” the CEO said at the time.
Magazine: Bitcoin 2023 in Miami comes to grips with ‘shitcoins on Bitcoin’
