Coatue Management, a tech-focused investment manager, has announced a $150 million investment in Bitcoin miner Hut 8 Corp. The investment will be made through a convertible note and is set to pay out 8% annually for a term of five years. Hut 8 will have the option to extend the note for up to three additional one-year periods. The investment is considered a senior unsecured obligation of Coatue Management. Billionaire Philippe Laffont, the owner of Coatue Management, believes that Hut 8 is well-positioned to take advantage of new compute capacity and any related opportunities. The transaction is expected to be completed by July 11, with the investment agreement already filed with the United States Securities and Exchange Commission. Hut 8 is one of the largest public miners in terms of computing power and is currently valued at $1.1 billion. The company was one of the first to enter the high-performance computing business in the crypto industry, which is now in demand for generative AI models and applications. Other cryptocurrency miners, such as Core Scientific and TeraWulf, have also been involved in hosting data centers and striking deals with AI companies. These companies have seen their stock prices rise after making AI-focused deals. Coatue partner Robert Yin believes that the market is recognizing the scarcity of high-quality power assets, and Hut 8 has a strong pipeline of attractive and expandable assets. Following the Bitcoin halving in April, mining firms have been seeking ways to stay competitive amidst profitability challenges. Hut 8 has expressed its plans to expand its self-mining operations and diversify its revenue streams.
Hut 8 secures 150M investment amidst the rise of AI boosting its Bitcoin mining operations