Hut 8 (TSX:HUT) Stocks Jump As Crypto Market Rebounds: Worth A Buy?

Stocks of crypto miner Hut 8 Mining Corp (TSX:HUT) rose as much as seven per cent on Thursday morning (11:45AM EST), May 20, as the cryptocurrency market rebounded from its Wednesday lows.

Bitcoin bounced back by 15 per cent to US$ 42,000 apiece on Thursday, recovering from its price loss recorded on May 19. It is up by about 44 per cent year-to-date (YTD).

Ether, on the other hand, climbed as much as 33 per cent to nearly US$ 3,000 apiece. It posts a rise of over 295 per cent this year.

The bitcoin miner’s stock has gained in line with the largest crypto-token, up 45 per cent YTD.

Let us delve deeper into Toronto Stock Exchange (TSX)-listed Hut 8 Mining’s stock performance.

Hut 8 Mining Corp (TSX:HUT)

The finance technology (fintech) firm graduated to the TSX from junior platform Toronto Stock Venture Exchange (TSXV) earlier this year amid the crypto market frenzy. It holds a market cap of about C$ 620 million, and its shares were trading at C$ 5.19 apiece on Thursday morning (11:25 AM EST).

Hut 8 stock witnessed a heavy selloff over the past five days, tumbling as much as 19 per cent. However, the crypto stock has grown 331 per cent in the last nine months and yielded around 295 per cent in the last six months.

The company reportedly repaid its loan worth US$ 20 million in advance and saved almost US$ 1.6 million interest charges in the first quarter of 2021.

Hut 8 had 3,012 BTC tokens holding as of mid-February 2021. It earns a yearly interest of 4.5 per cent on 1,000 BTC tokens deposited in the Genesis account.

Hut 8 Mining's One-Year Price Movement Against Moving Average Multiple. (Source: Refinitiv)

At the previous closing price of C$ 5.12, Hut 8 stock was up 9.5 per cent from its 200-simple moving average (SMA), maintaining a long-term uptrend. However, it declined by 28 per cent against the 30 SMA, led by the recent bearish trend in the crypto market.  

The small-cap stock has a 10-day average trading volume of 1.7 million. Hut 8 expects to bolster its cryptocurrency mining operation by scaling up energy capacity by almost 30 per cent this year.

The above constitutes a preliminary view and any interest in stocks should be evaluated further from investment point of view.

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