The recent rise in Bitcoin (BTC-USD) prices has prompted a lot of gains for cryptocurrency stocks. But for cryptocurrency miner Hut 8 Mining (TSE:HUT) (NASDAQ:HUT), it hasn’t exactly done much. In fact, Hut 8 is down fractionally in Tuesday afternoon’s trading despite plans to expand its operations.
Hut 8 is actually one of the largest digital asset mining operations in North America, and it’s poised to make a play for the “largest” title. Not all at once, but still; it’s looking to build a new mine in Culberson County, Texas, which will pull 63 megawatts of power. To bankroll that project, the firm looks to use some of its Bitcoin reserves.
Since Hut 8 has just over 9,100 coins—worth about US$517 million as of this writing—it could certainly stand to take a portion of said coins and drop them into a new mining operation. Given that Bitcoin will become more scarce as we go along, it’s reasonable enough to project that Bitcoin’s value will increase unless some serious economic troubles hit that make Bitcoin a lot less of a priority.
An Interesting Strategy
This move comes after Marathon Digital (NASDAQ:MARA) paid off Hut 8 in exchange for full control of two new mining facilities. The two facilities—one located in Nebraska and the other also in Texas—have a combined capacity of 390 megawatts. Hut 8’s new facility comes in at about a fifth of that, which might explain why investors weren’t exactly over the moon to hear about it.
Is Hut 8 Mining a Good Buy?
Turning to Wall Street, analysts have a Hold consensus rating on HUT stock based on one Buy, one Hold, and one Sell assigned in the past three months, as indicated by the graphic below. After an 11.57% rally in its share price over the past year, the average HUT price target of C$13.83 per share implies 11.26% upside potential.
