CRYPTO– One of the largest publicly traded bitcoin mining companies, Hut 8 Mining Corp., has announced that it has signed a credit facility with a subsidiary of Coinbase Global Inc. for $50 million. The deal came as Bitcoin miners prepared for an event that had been pre-programmed into the digital asset’s blockchain and was given the name the halving.
The amount of the token paid to miners, which has been the main source of income for these companies, will be halved every four years as a result of the update. This will continue until supply reaches its cap of 21 million tokens around 2140. In 2024, the reward given to miners for successfully processing one unit of data on the network will be reduced by 6.25 Bitcoin at 3.125 Bitcoin.
Hut 8, a Toronto-based company, released a statement on Monday in which CEO Jaime Leverton said “this credit facility gives us additional financial flexibility.” “At the same time, it ensures that we will be able to maintain our active Bitcoin cash management strategy until the halving,” Hut 8 is one of the very few Bitcoin miners who have continued to s cling to the money he mined. despite the long lasting bear market. Miners are forced to look for alternative sources of income as they cannot sell their Bitcoin holdings through this technique. While this helps companies become proxies for Bitcoin and attracts investors seeking exposure to the digital asset in the stock market, it also encourages miners to seek other sources of income.
Bitcoin miners have been given a reprieve following the recent rise in the price of Bitcoin; However, rising electricity costs, growing debt that miners have accumulated since the previous 2021 bull market, and increased competition among miners have all limited their ability to fully recover. After a series of crypto lenders went bankrupt due to repeated meltdowns in 2018, it was difficult for them to borrow funds through debt financing. This is due to the volatility of the cryptocurrency market. After plummeting around 90% in 2022, the value of a Hut 8 share has more than tripled this year, hitting nearly $2.90.