Donald Trump's family partners with Hut 8 for new Bitcoin mining venture

By Emily Nicolle

 

The Trump family is set to launch a Bitcoin mining-focused venture with Hut 8 Corp., the latest expansion of the US president’s ties to the cryptocurrency sector. 

Hut 8 is launching American Bitcoin Corp. as a majority-owned subsidiary, focused exclusively on Bitcoin mining and “strategic Bitcoin reserve development,” the Miami-based company said in a statement Monday. 

 

During the presidential campaign, Donald Trump vowed to ensure that all remaining Bitcoin is “made in the USA” and to establish a Bitcoin reserve. Trump used to be a skeptic about digital assets but pivoted to embracing the sector on the campaign trail, in part as the industry ramped up its involvement in the election through sizable political donations.

 

The launch of the mining venture follows Hut 8’s acquisition of a majority interest in American Data Centers Inc., a company formed by a group of investors including Eric Trump and Donald Trump Jr. Following that transaction, American Data Centers has been renamed and relaunched as American Bitcoin Corp., Hut 8 said.

 

The president’s previous forays into crypto include issuing collections of nonfungible tokens, digital collectibles that show him in a variety of poses and costumes. Along with his sons, he’s also endorsed the World Liberty Financial decentralized finance project. Last week World Liberty said it plans to launch a stablecoin.

 

Earlier this month, Trump signed an executive order calling for the creation of a Strategic Bitcoin Reserve and a separate stockpile of other digital assets. While the creation of the reserve fulfilled a promise Trump made on the campaign trail, the details fell short of industry expectations. 

 

Hut 8 has transferred substantially all of its ASIC mining equipment to the new American Bitcoin entity in exchange for an 80 per cent stake in that business, it said. Eric Trump will serve as American Bitcoin’s chief strategy officer.

 

As Bitcoin more than doubled last year, Hut 8 saw revenue jump by almost 70 per cent to $162 million on net income of around $331 million. Revenue is projected to have declined in the first quarter and analysts surveyed by Bloomberg expect a loss for the period.  

 

Shares of Hut 8 rose rose about 4.3 per cent as of 10:17 a.m. in New York. The stock has slumped about 40 per cent so far this year.

 

Donald Trump made the mining pledge in a post on his Truth Social account in June after meeting at Mar-a-Lago with a group of executives from crypto miners, the companies whose massive, high-tech data centers do the work that facilitates transactions on the blockchain in exchange for compensation paid in Bitcoin or other cryptocurrencies.

 

The Bitcoin mining sector in the US has morphed into a multi-billion dollar industry over the last several years as the token saw exponential increases in prices. The total computing power generated from US-based miners was below 50 per cent as of the end of last year.       (Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)