Hut 8 borrowed $11.8m at 16.5% APR to buy bitcoin miners

Canadian mining firm Hut 8 said it has completed an $11.8 million equipment purchase financing loan from Foundry, a subsidiary of Barry Silbert’s Digital Currency Group (DCG).

The loan was obtained by Hut 8 at 16.5% per annum for a term of 12 months.

In addition to Foundry’s allocation, Hut 8 will make a $2.9 million deposit to pay for an order for 5,400 units of MicroBT’s Whatsminer M30S ASIC miner. „DCG’s subsidiary partnered with the Chinese manufacturer last year.

The Canadian company expects to launch the first batch of new devices by the end of January. Hut 8 expects deliveries to be completed within six months.

The firm’s bitcoin mining capacity will increase by 475 PH/s once the entire order is received. The company’s current hash rate is 1,039 PH/s.

Hut 8 noted that amid the emerging shortage of mining equipment, manufacturers Crypto Trader have started demanding upfront payments of 50% to 100% for the order. The partnership with Foundry helps solve the problem of access to the latest generation equipment, the firm said in a press release.

„Our partnership is based on Hut 8’s continued commitment to overcoming hardware supply constraints and reducing capital costs through a proactive fleet management strategy to achieve a balanced portfolio of both new generation and high-margin models from previous series,“ said Hut 8 CEO Jamie Leverton.

In taking over Foundry, Barry Silbert-founded DCG pledged to invest $100m in it over the course of 2021.

Recall that last year, Hut 8 raised $8.3m by selling an equity stake to buy miners from MicroBT.