One of Canada’s largest block reward miners has released its fiscal year-end results for 2020, revealing that it had its best year yet. Hut 8 (TSX: HUT|OTCQX: HUTMF) increased its net income by 87 percent year on year, while its working capital increased by 246 percent.
Despite nearly doubling its net income, the company’s total revenue fell from $82 million in 2019 to $40.7 million in 2020, despite nearly doubling its net income. This was attributed by the company to the drop in BTC halving and the COVID-19 pandemic. Working capital, on the other hand, increased 246 percent to $75.7 million on December 31, 2020, from $21.9 million the previous year.
CEO Jaime Leverton commented on the financial results, saying,
“Now, with a new leadership team, increased revenue diversification and one of the largest amounts of installed capacity actively mining during this current period of highly profitable mining economics, I am incredibly optimistic about Hut 8’s prospects for the future.”
The financial results come as the company invests $30 million in Nvidia’s new block reward mining-specific graphics processing units. The new GPUs, known as ‘cryptocurrency mining processors’ (CMP), are Nvidia’s attempt to deter block reward miners from gobbling up the ordinary GPUs that gamers rely on. Nvidia has recently received complaints from gaming enthusiasts about a shortage of GPU supply.
Hut 8 intends to use the new GPUs to diversify from mining one speculative asset with no utility in BTC to mining another asset whose ridiculously high fees have rendered it unusable in real-life—Ethereum. The latter recently embarked on a journey to become a proof-of-stake network—which is still not scalable—without considering whether it now meets the definition of a security as defined by US regulators.
Hut 8, which is listed on the Toronto Stock Exchange, takes pride in being the public company with the most self-mined BTC on its balance sheet. CEO Leverton has stated that this is a huge accomplishment, especially given the difficult year block reward miners had in 2020.
Holding BTC has benefited the company over the last year, as BTC has set new price records every other week. This is due to a combination of factors, including a few institutional buyers hyping the market (such as Tesla) and a resurgence of FOMO in the digital currency market. FOMO, on the other hand, will fade away, as it always does. The digital currencies with no utility, led by BTC and Ether, will crash again, as they did following the 2017 rally.
Only BSV will survive as a digital currency that can scale for the masses, process transactions at very low costs, power micro- and nano-transactions, have a thriving ecosystem of day-to-day users, and support real-time transactions.