What happened
Shares of cryptocurrency stock Hut 8 Mining (HUT) jumped as much as 17.1% in trading on Thursday after announcing an operational update. Shares were still up 8.5% at 2:10 p.m. EDT.
So what
Management announced that during the month of August 2021, Hut 8 Mining mined 326 Bitcoins (BTC 0.79%) and held a total of 4,450 Bitcoins by the end of August. Management also said that the total cost per Bitcoin is expected to be under 3 thousand Canadian dollars ($2,378), which is incredibly low given Bitcoin's price of $49,520 as I'm writing.
Image source: Getty Images.
As much as the operational update was important, the rise in the price of Bitcoin today may be having an even bigger impact on the stock. Bitcoin jumped over $50,000 early in trading today. The amount Hut 8 Mining holds alone can move the stock.
Now what
Given how much Bitcoin Hut 8 Mining has on the balance sheet, it's not surprising to see the stock jump when Bitcoin rises. But the fact that management expects a cost of just CA$3 thousand for each Bitcoin could lead to a high-margin business. I'll be watching margins and the company's cost trajectory as it adds more miners throughout the quarter to see if this pop is actually a long-term trend for this crypto miner.
