Hut 8 Stops Bitcoin Mining Due to Energy Conflict – Bitcoin (BTC/USD), Hut 8 Mining (NASDAQ:HUT)
Bitcoin BTC/USD miner Hut 8 Mining Corp COTTAGE is looking for the mediation of a third-party energy supplier after a disagreement over a joint power purchase agreement led to parts of the business being closed.
The Canadian company was forced to halt bitcoin mining at its facility in North Bay, Ontario, after the energy supplier Validus stopped supplying the place with energy.
The mining company operates two other mining sites in southern Alberta.
The service provider alleged that Hut 8 missed payments on time. Hut 8 released a statement on Monday refuting those claims.
Hut 8 claimed earlier this month that it had served Validus with a notice that the energy supplier was on the verge of defaulting on its obligations under the terms of the two companies’ power purchase agreement.
Hut 8 accused Validus of failing to meet specific operational milestones by key dates outlined in the terms.
Hut 8 also reported ongoing talks with Validus have so far failed to mitigate the operational and financial effects of associated issues.
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As of June, the Ontario site had 5,800 installed miners, used 20 MW of power, and contributed 20% of Hut 8’s total hashrate.
Hut 8 indicated that they were using a third party to mediate the dispute with Validus and expressed optimism that a settlement could be reached without going to court. As for the operational benchmarks they claimed Validus had missed, they declined to elaborate.
Cabin 8 could have survived without the disturbance
Most miners are finding it difficult to overcome significant obstacles due to a sharp decline in Bitcoin’s price, which has lost 66% of its value so far this year.
In fact, profits have been negatively affected by high electricity costs, low Bitcoin prices and increasing mining difficulties.
Hut 8 thus experienced a 36% loss in third-quarter revenue from the same time last year, going from $50.3 million to $31.7 million, according to its latest financial reports.
Mining profit for the same quarter fell 72% to $9.3 million from $33.5 million in Q3 2021.
Last year at this time, Bitcoin was trading at around $60,000, and now it’s around $16,500.
Despite the challenging market conditions, Hut 8 has publicly committed to holding all Bitcoin.
As of late August, the company was still mining 12.1 BTC ($200,000) each day, maintaining a total of 8,111 BTC ($133.6 million).
Along with most of its competitors, the company’s stock, which has a market cap of around $220 million, has also suffered, falling more than 85% so far this year, making it even more imperative to get the miners back as quickly as possible.
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