American Bitcoin hit the ground running when it came out of stealth in March. But a new funding deck reviewed by Blockspace shows the company’s ambitions are growing, with American Bitcoin seeking an undisclosed amount of fundraising to increase its hashrate under capacity from 10 EH/s to 25 EH/s.
American Bitcoin turned heads mid-March when it emerged as a subsidiary of Hut 8, peeling away Hut 8’s mining assets in return for Hut 8’s 80% stake in the company. Eric Trump joined the fledgling Bitcoin miner as co-Founder and chief strategy officer.
Read: Hut 8’s big bet on Trump-affiliated American Bitcoin
The investor deck Blockspace obtained reveals American Bitcoin will use an “asset light” strategy to funnel “nearly 100% of growth capital to ASICs and Bitcoin accumulation.”
The deck goes on to state that the next leg of growth for American Bitcoin is the purchase of Hut 8’s 15 EH/s allocation of Bitmain’s U3S21EXPH. Assuming execution, American Bitcoin would place the units at Hut 8’s Vega site, a 205 megawatt facility in West Texas.
Hut 8 announced the installation of the direct-to-chip liquid cooled ASICs in September of last year in a hosting agreement with Bitmain. The deal gives Hut 8 the option to purchase the 15 EH/s of U3S21EXPHs in three tranches.
Based on current pricing sheets reviewed by Blockspace, American Bitcoin is staring down a hefty cost of $23.9 / TH. Pricing sheets reviewed by Blockspace last September during the initial announcement list units at $30.7/TH. At 15 EH/s, that would bring the total purchase price north of an estimated $300 million (coupons and delayed payment schemes will likely alter the final price considerably).
The additional units would bring American Bitcoin’s hashrate under management to 25 EH/s. Comparing active hashrate and marketcap with other bitcoin miners, American Bitcoin forecasts a $1.65 billion marketcap after deploying the units.
Hashrate go up–got it. But what’s next?
A bitcoin treasury strategy.
American Bitcoin plans to issue convertible notes, equity, and utilize other financial engineering to increase its “bitcoin per share.” (Ironically, American Bitcoin criticizes peer miners for using at-the-market offerings in the deck, yet later states it plans on issuing new equity as a growth vehicle).
However, the deck leaves us with more questions than answers. For one, how is the overall deal accretive to Hut 8 shareholders given they will likely lease current sites to American Bitcoin at a discount to market rates? Conversely, if Hut 8 prices its rackspace at market rates, that hurts American Bitcoin’s bottom line.
Hut 8 declined to comment.
