What Hut 8 CEO's resignation means for Bitcoin investing
Hut 8 Mining’s chief executive Andrew Kiguel is resigning. The move, for which a reason was not given, comes after a significant milestone for the company.
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Hut 8 Mining’s chief executive Andrew Kiguel is resigning. The move, for which a reason was not given, comes after a significant milestone for the company, which has sites in Canada’s oil-rich Alberta province.
Vancouver’s Hut 8, which used to call itself the biggest publicly listed cryptocurrency-generation company, has recently been conditionally approved for the Toronto Stock Exchange (TSX). It was previously on an exchange within TSX with lower listing requirements.
What is interesting is that with the news of Kiguel’s departure, Hut 8’s stock fell 40 per cent.
The shares of a Bitcoin mining company, which runs machines to generate the cryptocurrency, are just like that of a gold mining company, going and up down together with that of the underlying commodity.
But while there was a fall in Bitcoin during the period right after the news of Kiguel’s departure, it was no more than 2 per cent. Without the Kiguel news, the stock would likely have not fallen as much as it had.
While buying those shares in a Bitcoin company is a way to profit off the price movements without actually going to the trouble of buying Bitcoin, investors need to keep in mind that it is far from a perfect correlation, as shown by Hut 8’s recent price drop.
Hut 8’s shares, however, did pick up when Bitcoin surged later in the week, the cryptocurrency breaking $9,900 on some exchanges.
Bitcoin is at $10,104 (C$13,413) as of noon Sunday, Eastern Time, up almost 10 per cent for the week.
Bitcoin will likely push toward October highs of $10,350, technical analysis suggests.
News: Coronavirus’ affecting miners; SEC proposes amnesty
Speaking of cryptocurrency mining, that world is expected to be shaken up by China’s Wuhan coronavirus, an analysis by the major publication The Block suggests. Miners are girding for the so-called halving, a reduction of their rewards this year inbuilt in Bitcoin’s protocol, and need new equipment. But due to the outbreak in China, several Chinese mining hardware manufacturers are at a standstill.
The U.S. Securities and Exchange Commission’s senior official Hester Peirce, nicknamed “Crypto Mom” by the blockchain community, has formally proposed a three-year rule-exemption for cryptocurrency projects that raise funds by selling digital tokens; by the end of that, they have to come to compliance. The move comes as major projects come under regulatory spotlight, and as China tries to dominate the blockchain sector.