As the current crypto rally continues sending Bitcoin (BTC-USD) upward, two leading companies in the space have completed a successful merger. On Nov. 30, Canadian crypto mining firm Hut 8 Mining Corp (NASDAQ:HUT) announced that it had officially joined forces with US Bitcoin Corp. This move could easily create a prominent new crypto player. Today marks the first day of trading on the Nasdaq and Toronto Stock Exchange for the newly minted HUT stock. While the previous shares of Hut 8 have been delisted from both exchanges, investors who held it will receive “0.2 of a share of New Hut common stock for every Hut 8 share held.”
What should investors expect from this new crypto stock as the rally keeps digital asset prices elevated? Let’s take a closer look at this new company and assess what its future may hold.
What’s Happening With HUT Stock
Prior to the current rally, most crypto mining stocks had been struggling as they faced an uncertain future. Now many companies in the space are back in full focus and investors look for ways to profit off the current rally. The timing has been excellent for HUT stock. Shares surged on November 30 on news that the merger had been completed. While the momentum has slowly subsided today, the new stock is still up almost 350% for the month.
Even with HUT stock down 10% today, this response to the merger sets a positive tone. Jaime Leverton, CEO of the new Hut 8 Corp, issued the following statement on the successful deal:
“This business combination is the largest M&A transaction that has ever transpired within our industry and represents a highly strategic union of two organizations with complementary strengths, that together, will prove to equal more than the sum of their parts. We are excited to move forward and continue growing, with a pipeline of greenfield and brownfield opportunities, integration across the mining value chain, leading operational leverage and expertise, and diverse and uncorrelated fiat revenue streams.”
The timing of this business combination is important for another reason. The next Bitcoin halving event is slated for April 2024. Cointelegraph reports that after the merger, Hut 8 has “access to approximately 825 MW [megawatts] of gross energy across six sites with self-mining, hosting, and managed service operations.” Historically, Bitcoin halving occurs, it often boosts the crypto’s prices. Crypto miners will be bracing for it and its new power puts Hut 8 in an excellent position.
What Comes Next
How long will the current crypto rally continue? No one can say for sure. But with the next Bitcoin halving approaching quickly, HUT stock will likely benefit from the momentum generated by the event. There’s no denying that Hut 8 has always been heavily reliant on underlying crypto sentiment. But right now, sentiment toward Bitcoin and other leading cryptos is bullish. For the time being, the new HUT stock is well positioned to continue riding the wave. Crypto mining stocks are at the mercy of a volatile market but at least for now, investors can relax.
On the date of publication, Samuel O’Brient did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
