Hut 8’s business diversity to give it an edge after the halving: Benchmark

Bitcoin miner Hut 8’s diversified revenue streams could give it an edge over competitors in the long term, according to analysts at Benchmark.

The research firm started covering the stock on Monday, three days after the Bitcoin halving — when per-block rewards dropped from 6.25 BTC to 3.125 BTC.

Mark Palmer, a senior equity research analyst at Benchmark, gave Hut 8 a buy rating and a price target of $12 — roughly 50% higher than the level it trades at today.

The stock was trading up 5% at $8.49 midday Monday — down 36% year to date but up 16% in the last five days.

Hut 8 has a 2025 enterprise value-to-revenue multiple of 2.6 — compared to the average 3.1 multiple of its competitors, according to Benchmark data. The research included the multiples of Marathon Digital, Riot Blockchain, CleanSpark, Bitfarms, Cipher Mining, Iris Energy, Hive Digital Technologies and TeraWulf when assessing the peer average.

The figures are based on consensus 2025 revenue estimates, and the enterprise values include the companies’ net debt balances.

“We expect Hut 8 to close the valuation gap with listed peers that are further along in boosting their self-mining capacity as it executes on the build-out of its platform,” Palmer told Blockworks.

Investors are particularly focused on self-mining right now given expectations that the price of bitcoin will rally aggressively following the latest halving, he noted.

Hut 8’s self-mining deployed hash rate stood at 5.4 exahash per second (EH/s), well behind some of the space’s largest players in that category. The leader in that category, Marathon Digital, had 27.8 EH/s of installed hash rate at that time.

“At the same time, we believe the diversity of Hut 8’s platform will benefit it over the long-term, as its revenue streams outside of self-mining position it to weather severe downturns in bitcoin’s price better than most of its listed peers, in our view,” Palmer said.

The coverage — and buy rating — comes several months after Hut 8 and US Bitcoin Corp. underwent a “merger of equals” that closed in November.

The combined company — with 25.5 EH/s of hash rate and 884 megawatts (MW) of energy capacity under management — also has business lines focused on managed services, hosting, high-performance computing and AI.

Hut 8 CEO Asher Genoot has said during his two-plus months in the chief executive role that he was looking at every business line to figure out how to nix inefficiencies and reduce costs.

Hut 8 said last week it had energized a third of its 63 MW Salt Creek site in Culberson County, TX. The company had relocated miners to Salt Creek from its Kearney, NE and Granbury, TX sites.

“With Salt Creek, we gain critical control over our miner fleet and operating costs as we head into the halving,” Genoot said in a statement. “Our outlook on energy prices at the site suggests that the potential for cost savings relative to our cost of mining at Kearney and Granbury is in line with the 30% reduction initially projected.”

Though Hut 8’s mining fleet needs more efficiency upgrades, Palmer said, its holdings of 9,102 BTC — second in the mining segment to Marathon Digital — give it a solid liquidity cushion and the ability to capture upside during bitcoin price rallies.

He added: “The company’s diversified model and relative strength in bitcoin’s price should support its operating performance until new equipment is purchased and deployed.”

Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.

Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. Subscribe to the Forward Guidance newsletter.

Get alpha directly in your inbox with the 0xResearch newsletter — market highlights, charts, degen trade ideas, governance updates, and more.

The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.