Hut 8 Partners with Trump Family to Launch American Bitcoin Corp., Looks to Expand Data Center Business
Hut 8 Mining (HUT) is considering the option to spin off its new subsidiary, American Bitcoin Corp., which is a collaboration between the mining company and the Trump family. This move would allow Hut 8 to focus more on its data center hosting services, according to Clear Street’s recent report.
The report highlighted that while American Bitcoin will initially be included in Hut 8’s financial results, the two businesses could be separated, enabling Hut 8 to focus on the high-margin potential of its data center hosting revenue. The new subsidiary will play a crucial role in Hut 8’s plan to secure more energy resources and expand its data center business, with the possibility of partnering with hyperscalers being an important driver for growth.
Eric Trump and Donald Trump Jr. have taken a 20% stake in the newly formed American Bitcoin Corp. through their firm, American Data Centers, while Hut 8 retains an 80% ownership share and contributes approximately 61,000 mining rigs to the new venture. This collaboration is a continuation of the trend where bitcoin miners are pivoting towards cloud services, similar to Core Scientific’s partnership with CoreWeave, which helped redefine expectations for the sector.
Clear Street sees significant growth potential for Hut 8, particularly as it enters a new phase in the second half of the year. A key catalyst for this growth will be the energization of Hut 8’s BITMAIN Colocation agreement. Clear Street maintains a buy rating on Hut 8 with a $23 price target, while the shares saw a slight increase of more than 4%, reaching $12.10 in early trading.
KBW has also given Hut 8 an outperform rating, setting a $30 price target. The investment bank noted the appointment of Eric Trump as the chief strategy officer for American Bitcoin as a positive development, citing his extensive industry knowledge and network as a valuable asset to the company.
