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The shares of Bitcoin miner Hut 8 have collapsed by more than 23%, down from $9.30 to as low as $7.10 in after-hours trading following a report claiming that insiders are preparing to dump the stock, causing financial losses to investors.&nbsp;
The shares of the mining company tanked the same day activist short-selling firm JCapital Research published a report called “The Coming HUT Pump and Dump.”
<h2 id="span-style-font-weight-400-hut-8-insiders-to-dump-shares-span">Hut 8 Insiders to Dump Shares?</h2>
According to the data from<a href="http://tradingview.com" rel="noopener noreferrer nofollow"> TradingView</a>, the shares of Hut 8 have dropped almost 23% after JCapital Research<a href="https://www.jcapitalresearch.com/uploads/2/0/0/3/20032477/2024_01_18_hut.pdf" rel="noopener noreferrer nofollow"> stated</a> that the miner’s merger with another Bitcoin miner, US Bitcoin (USBTC), could put the shareholders money at risk.&nbsp;
It is important to note that JCapital Research<a href="https://www.jcapitalresearch.com/index.html" rel="noopener noreferrer nofollow"> admits</a> the fact that it is short-side biased on its website.&nbsp;
<h3 id="span-style-font-weight-400-investors-at-harm-span">Investors at Harm</h3>
The report pointed out that the $725 million merger deal between the two Bitcoin miners might harm investors since USBTC has a history of “legal trouble” and most of its shares are held by an “undisclosed related party.”
“We uncover that USBTC is backed by promoters with a history of legal trouble. In its short existence, USBTC appears to have defaulted on a loan and paid two government fines, one for committing securities violations,” JCapital claimed.
<h2 id="span-style-font-weight-400-pump-and-dump-span">Pump and Dump</h2>
USBTC’s CEO, Michael Ho, who is now the chief strategy officer for Hut 8, hid his relationship with stock promoters called the Honig Group, noted JCapital while adding that Honig was<a href="https://www.sec.gov/litigation/litreleases/lr-24529#:~:text=The%20SEC's%20complaint%20charges%20Honig,and%20Rule%2010b%2D5%20thereunder." rel="noopener noreferrer nofollow"> accused</a> of orchestrating a “classic pump and dump” and “fraudulent schemes” by the United States<a href="https://thecoinrise.com/binance-vs-sec-judge-to-decide-whether-crypto-is-security/" rel="noopener noreferrer nofollow"> Securities and Exchange Commission (SEC)</a> in 2019.&nbsp;
“Ultimately, we strongly believe that [HUT} shareholders are likely to feel the pain of being on the wrong side of an over-levered pump-and-dump, only to be left holding the most inefficient Bitcoin miner, which is unprofitable even at a Bitcoin price of over $60,000,” the report said.
<h3 id="span-style-font-weight-400-hut-8-reports-record-holding-span">Hut 8 Reports Record Holding</h3>
As reported earlier by TheCoinRise, Hut 8<a href="https://thecoinrise.com/hut-8-a-crypto-mining-firm-confirms-record-holding/" rel="noopener noreferrer nofollow"> confirmed record revenue from mining in March 2022</a>, adding that its holdings went up by a whopping 100% in the year 2021.
The announcement was made a few months after the Bitcoin mining company purchased<a href="https://thecoinrise.com/crypto-miner-hut-8-purchases-12000-new-microbt-miners/" rel="noopener noreferrer nofollow"> 12,000 new MicroBT M30S, M30S+, and M30S++ miners</a> worth $58.7 million.
The post <a href="https://thecoinrise.com/hut-8-shares-have-nosedived-by-23-heres-why/" rel="noopener noreferrer nofollow">Hut 8 Shares Have Nosedived by 23%: Here’s Why</a> appeared first on <a href="https://thecoinrise.com" rel="noopener noreferrer nofollow">Latest News and Insights on Blockchain, Cryptocurrency, and Investing</a>.

Hut 8 Shares Have Nosedived by 23%: Here’s Why

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