By Ketki Saxena
Investing.com -- Hut 8 Mining (TSX:HUT) Corp., one of the largest public Bitcoin mining companies, announced that it has secured a $50 million credit facility with a subsidiary of Coinbase (NASDAQ:COIN) Global Inc.
"This credit facility provides us with increased financial flexibility," said Jaime Leverton, CEO of Toronto-based Hut 8, in an official statement on Monday. "Simultaneously, it ensures that we can continue our dynamic Bitcoin treasury management strategy going into the halving."
The "halving" is a planned reduction in rewards miners receive, which typically occurs every four years or so. More precisely, it is written into the Bitcoin code to happen every 210,000 blocks of transactions
The credit facility is set to mature 364 days after the date of the initial borrowing and obligations under this agreement are backed by Hut 8's interest in specific Bitcoins held in custody by Coinbase Custody Trust Company, LLC. The facility will require maintaining a specified loan-to-value ratio throughout its duration.
All borrowed amounts will carry an interest rate equal to either the federal funds rate on the date of each applicable borrowing or 3.25%, whichever is greater, plus an additional 5.0%.
So far this year, shares of Hut 8 have more than tripled following nearly a staggering decline of almost 90% witnessed in 2022.