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Seeking Alpha 2022-10-06 20:13:45

Hut 8 Mining: 3 Reasons Why Timing The Market Beats Time In The Market

SummaryHut 8's main point of attraction (trading below book value) does not provide a sufficient long-term investment value proposition for 3 reasons.Dilution: Long-term investors since 2020 have seen their ownership decline 53% while the announced $265mil is expected to increase it to 80%.HUT's business model and unlimited amount of authorized shares indicate that dilution can occur indefinitely.Lack of Growth: HUT's capacity growth has been trailing comps (BITF and CLSK) and is expected to lose share in the Bitcoin network as cash raised isn't aimed at growth.Volatility Dynamics: HUT's volatility is significantly higher than comps due to lack of business fundamentals/growth and heavy reliance on asset value (Bitcoin) to derive intrinsic value.IntroductionHut 8 Mining's (HUT) main investment value proposition is derived from its commitment to HODL 100% of its Bitcoins (BTC-USD) mined:Keeping with our longstanding HODL strategy, 100% of the self-mined Bitcoin in September were deposited into custodyIn our previous coverage, we determined that the benefit of such a commitment is to provide shareholder value through asset value appreciation when Bitcoin rebounds. However, the side effect of such commitment is HUT's severe shareholder dilution.Conventional wisdom suggests time in the market beats timing the market. However, this study aims to argue that investors should time their investments into HUT.Reason 1: Another Round Of 7...

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