Benchmark Issues "Buy" for Bitcoin Miner Hut 8, Sets $12 Price Target

Investment banking firm Benchmark has given Bitcoin miner Hut 8 a “buy” rating with a target price of $12 per share. Hut 8 is expanding its self-mining operations and diversifying its revenue streams to stay competitive post-halving. Despite having a lower self-mining hash rate than competitors, Benchmark expects Hut 8 to close the gap over time.

Investment Banking Firm Issues "Buy" Rating for Bitcoin Miner Hut 8, Projecting $12 Share Price Target

In a move that signals a bullish outlook for the cryptocurrency mining industry, investment banking firm Benchmark has issued a "buy" rating for publicly traded Bitcoin miner Hut 8 Corp. The rating is accompanied by a price target of $12 per share, representing a significant upside potential for investors.

Hut 8's Strategy for Post-Halving Market

Hut 8 is a leading Bitcoin miner with a diverse portfolio of revenue streams, including self-mining, cloud computing, high-performance computing, and artificial intelligence (AI) services. The company is actively pursuing expansion of its self-mining operations and diversification of revenue streams to maintain a competitive edge in the post-halving market.

Benchmark analyst Kevin Palmer cited Hut 8's multiple revenue streams as a key factor in the firm's decision to issue a "buy" rating. He noted that Hut 8's enterprise value-to-revenue multiple of 2.6 is slightly below the 3.1 average of its publicly traded Bitcoin mining peers, such as Marathon Digital and Riot Platforms.

Hash Rate Gap and Liquidity Cushion

While Hut 8 has a lower self-mining hash rate than its larger competitors, Benchmark believes that the company is well-positioned to close the gap over time. Palmer highlighted Hut 8's substantial liquidity cushion, evidenced by its holdings of 9,102 Bitcoin, which provide the company with flexibility to capture potential upside moves in the price of Bitcoin (BTC).

Leadership Shakeup and Cost Optimization

Recent leadership changes at Hut 8 have drawn attention, with Asher Genoot replacing former CEO Jamie Leverton. The company has refuted allegations made in a report that portrayed it in a negative light.

Under Genoot's leadership, Hut 8 has implemented strategic initiatives to optimize costs and boost Bitcoin production. This includes relocating efficient miners to its Medicine Hat site while retiring older, less efficient units.

Diversification as a Competitive Advantage

Hut 8's diverse business operations are expected to provide an advantage following the halving. Investors are showing increased interest in self-mining as they anticipate a substantial price increase for Bitcoin post-halving.

Hut 8's diversified platform, including its cloud computing, high-performance computing, and AI services, positions the company to withstand market downturns more effectively than its peers.

Ongoing Growth and Expansion

Hut 8's merger with US Bitcoin Corp. in November 2022 created a combined entity with a hash rate of 25.5 EH/s and 884 MW of energy capacity under management. The company continues to expand its managed services, hosting, and AI capabilities.

Genoot has emphasized the importance of reducing costs and increasing efficiencies across all business lines. The company has recently activated a third of its Salt Creek site in Texas, relocating miners from other locations to optimize operations.

Conclusion

Benchmark's "buy" rating for Hut 8 reflects the company's strong fundamentals, growth potential, and resilience in the face of market volatility. While Hut 8 lags behind Marathon Digital in installed hash rate, the company's diversified model and large Bitcoin holdings are expected to support its operating performance. Investors are encouraged to conduct thorough due diligence before making any investment decisions.

Disclaimer

The views and opinions expressed in this article are for informational purposes only and do not constitute financial advice. Investing involves substantial risk, and investors should always consider their financial situation and seek professional advice before making any investment decisions. Cryptocurrency investments are particularly volatile and carry a high level of risk.