Clear Street Reports Bitcoin Miner Hut 8 May Acquire Hyperscaler

Hut 8's (HUT) new subsidiary, American Bitcoin Corp., a partnership between the mining company and the Trump family, could be spun off into a separate entity that would allow the company to focus on data center hosting, according to a report from brokerage Clear Street on Monday.

The broker indicated that the new division will be included in the bitcoin miner's financial results, but “the business may be split, allowing HUT to focus on high-margin data center hosting revenue.”

The report highlights that Hut 8 is expected to gain more power and expand its data center hosting business, with the “opportunity to create a hyperscale solution” being a major catalyst for the company.

Eric Trump and Donald Trump Jr. are merging their company American Data Centers with American Bitcoin, a new mining venture, acquiring a 20% stake in the organization. The remaining 80% will belong to Hut 8, which is investing nearly 61,000 mining machines in the new entity.

Core Scientific's (CORZ) deal with cloud provider CoreWeave helped fuel a revaluation of the sector last year as investors warmed to the idea of Bitcoin miners shifting to artificial intelligence and high-performance computing (HPC).

The report also said Hut 8 is expected to enter a significant growth phase beginning in the second half of the year, “driven by the activation of the BITMAIN facility agreement.”

Clear Street gave Hut 8 shares a buy rating with a $23 price target. Shares rose more than 4% to $12.10 in early trading.

Investment bank KBW noted that Eric Trump will be taking over as chief strategy officer of American Bitcoin, which could be a significant plus given his “commitment to the industry and obvious connections.”

KBW assigned the stock an Overweight rating with a $30 price target.

Source: cryptonews.net