Hut 8 reports 87% rise in net income as it diversifies mining portfolio

One of Canada’s largest block reward miners has released its 2020 fiscal year-end results, revealing that it had its best year to date. Hut 8 (TSX: HUT|OTCQX: HUTMF) recorded 87% year-on-year jump in net income, with its working capital shooting up 246%.

Despite nearly doubling its net income, the company saw its total revenue drop from $82 million in 2019 to $40.7 million in 2020. The company attributed this to the drop on BTC halving and the COVID-19 pandemic. However, working capital was up 246% to $75.7 million on December 31, 2020, from $21.9 million a year prior.

Commenting on the financial results, CEO Jaime Leverton said, “Now, with a new leadership team, increased revenue diversification and one of the largest amounts of installed capacity actively mining during this current period of highly profitable mining economics, I am incredibly optimistic about Hut 8’s prospects for the future.”

The financial results come at a time when the company has invested $30 million in Nvidia’s new block reward mining-specific graphic processing units. Known as ‘cryptocurrency mining processors’ (CMP), the new GPUs are Nvidia’s effort to deter block reward miners from gobbling up the ordinary GPUs which gamers rely on. In recent times, Nvidia has faced complaints from gaming enthusiasts over a shortage in its GPU supply.

With the new GPUs, Hut 8 intends on diversifying from mining one speculative asset with no utility in BTC to mining another asset whose ridiculously high fees have made it impossible to use in real-life—Ethereum. The latter recently set out on a journey to being a proof-of-stake network—which is still not scalable—without paying any thought to whether it now falls within the U.S. regulators’ definition of a security.

Hut 8, which trades on the Toronto Stock Exchange, prides itself in being the public company with the highest amount of self-mined BTC on its balance sheet. CEO Leverton has been on record stating how big an achievement this is, considering the difficult year block reward miners had in 2020.

Holding BTC has worked well for the company in the past year as BTC has been hitting new price records every other week. This is due to a few factors that include a few institutional buyers hyping the market—like Tesla—and the resurgence of FOMO in the digital currency market. However, just like it always does, FOMO will fade away. The digital currencies that have no utility, led by BTC and Ether, will once again crash as they did after the 2017 rally. The only survivors will be digital currencies that can scale for the masses, that process transactions at very low costs, that power micro- and nano-transactions, that have a thriving ecosystem of day-to-day users, with real-time transactions – that’s to say, only BSV.

See also: TAAL’s Jerry Chan presentation at CoinGeek Live, The Shift from Bitcoin “Miners” to “Transaction Processors”