Hut 8 Shares Have Nosedived by 23%: Here’s Why

The shares of Bitcoin miner Hut 8 have collapsed by more than 23%, down from $9.30 to as low as $7.10 in after-hours trading following a report claiming that insiders are preparing to dump the stock, causing financial losses to investors. 

The shares of the mining company tanked the same day activist short-selling firm JCapital Research published a report called “The Coming HUT Pump and Dump.”

Hut 8 Insiders to Dump Shares?

According to the data from TradingView, the shares of Hut 8 have dropped almost 23% after JCapital Research stated that the miner’s merger with another Bitcoin miner, US Bitcoin (USBTC), could put the shareholders money at risk. 

It is important to note that JCapital Research admits the fact that it is short-side biased on its website. 

Investors at Harm

The report pointed out that the $725 million merger deal between the two Bitcoin miners might harm investors since USBTC has a history of “legal trouble” and most of its shares are held by an “undisclosed related party.”

“We uncover that USBTC is backed by promoters with a history of legal trouble. In its short existence, USBTC appears to have defaulted on a loan and paid two government fines, one for committing securities violations,” JCapital claimed.

Pump and Dump

USBTC’s CEO, Michael Ho, who is now the chief strategy officer for Hut 8, hid his relationship with stock promoters called the Honig Group, noted JCapital while adding that Honig was accused of orchestrating a “classic pump and dump” and “fraudulent schemes” by the United States Securities and Exchange Commission (SEC) in 2019. 

“Ultimately, we strongly believe that [HUT} shareholders are likely to feel the pain of being on the wrong side of an over-levered pump-and-dump, only to be left holding the most inefficient Bitcoin miner, which is unprofitable even at a Bitcoin price of over $60,000,” the report said.

Hut 8 Reports Record Holding

As reported earlier by TheCoinRise, Hut 8 confirmed record revenue from mining in March 2022, adding that its holdings went up by a whopping 100% in the year 2021.

The announcement was made a few months after the Bitcoin mining company purchased 12,000 new MicroBT M30S, M30S+, and M30S++ miners worth $58.7 million.