soaring share price — up more than than 357% in the past 12 months — has driven a huge increase in interest in mining the money for profit. Unfortunately, there’s one large hurdle for those who’d like to go far on the action: The toll of the machines used to mine coins runs about $16,000 each — and it’s non as if y’all demand just one of them.
But investors don’t have to lay out a small fortune to start mining. What’due south much more accessible is investing in Bitcoin mining companies that already have rigs fix. One such promising venture is
Hut 8 Mining
iv.88%), which has soared by more than 1,000% in the past year.
Why Hut eight Mining?
Much of Hut 8’due south entreatment lies in its plans to scale up its mining operations to perform 2.5 quintillion guesses per second — a measurement known as the hash charge per unit — in search of the mathematical solution needed to mine a new cake on Bitcoin’s blockchain. This equates to 1.78% of the network’s hash charge per unit and is a huge comeback over Hut 8’s 1 quintillion (an exahash) per second hash rate last year. The company mines betwixt 12 and 18 Bitcoins per day, worth between $518,000 and $778,000 at recent Bitcoin prices.
During the 2d quarter of 2021, Hut 8’s revenue increased by a stunning 263.v% from a twelvemonth before to $33.55 million Canadian dollars. At the same time, its operating income increased by 230.2% to CA$eight.12 million.
Right now, it owns near 4,450 BTC, valued at about $219.5 million, merely unlike other miners, information technology doesn’t program on only selling them as shortly every bit possible. To maximize shareholder returns, Hut eight lends out the BTC it mines. Coin owners can receive as much as 6.twenty% involvement per year from Bitcoin lending, based on current rates.
If that wasn’t enough, the company plans to take its operations to another level. Hut eight at present has nigh 144 megawatts (MW) of ability chapters, the equivalent of about 86 power turbines operating at low operation. But past 2022, it will expand that number to 209 MW. With more power, the company will be able to operate more mining rigs and, as a result, further increment revenue and earnings.
On meridian of that, Bitcoin’southward network use is near to rise. In November, the long-awaited Taproot upgrade will go live on its blockchain. Taproot will reduce transaction fees and improve the network’southward privacy, greatly encouraging its use in the fast-evolving cryptocurrency markets.
It’southward no surreptitious that the Bitcoin network consumes a lot of energy. In fact, one Bitcoin transaction uses as much electricity equally ane.2 one thousand thousand
transactions. As a result, Bitcoin miners that rely on coal power plants for electricity accept come under intense scrutiny, especially in Communist china.
Hut 8’southward operations are more environmentally sustainable than much of the contest’southward. The company’s mining rigs are located in Alberta, Canada, and apply electricity generated by a mix of natural gas, wind power, and solar energy. What’s more than, Hut 8’s mining rigs cost simply $0.022 per kilowatt hr to operate, which is the cheapest among publicly traded BTC mining companies.
Because of its fast revenue growth, Bitcoin lending, solid margins, and sustainability, Hut viii is a cryptocurrency mining stock that you don’t want to miss out on. Fifty-fifty with the stock trading at x times revenue, the valuation is well worth it, considering its futurity expansion plans and Bitcoin’s pending network overhaul.
Correction: A previous version of this article stated i Bitcoin transaction uses as much electricity as 12 million Visa transactions. It has been revised to reverberate the bodily equivalent, 1.ii million.
Zhiyuan Sun owns shares of Bitcoin. The Motley Fool owns shares of and recommends Bitcoin and Visa. The Motley Fool has a disclosure policy.