Why Hut 8 Mining Jumped 13% on Wednesday

January 26, 2022 by Fool Co

By: Fool Co | January 26, 2022

Hut 8 Mining (TSX:HUT)(NASDAQ:HUT) saw shares jump 13% on Wednesday. The tech crash seems to be on the rebound, and investors want to buy cryptocurrency companies like Hut 8 stock on the dip.

What happened?

Hut 8 stock climbed back 13% on Wednesday, after the company fell about 24% in the last month alone during the tech crash. This crash sent everything from e-commerce to cryptocurrency stocks falling. Yet a rebound underway has many investors wanting in on a deal.

That’s exactly what you get with Hut 8 stock, and many investors see the current rebound underway with Bitcoin as a catalyst to buy. Bitcoin increased about 3% on Wednesday, and Hut 8 is a huge miner of the cryptocurrency. Hut 8 continues to focus on its balance sheet first. And the surest way to keep it strong is mining Bitcoin.

So what?

If this digital asset is climbing back, you can bet Hut 8 stock should continue climbing too. But there are even more reasons to consider Hut 8 stock during this recovery. Right now, when crypto-related companies are down, there is likely to be a slew of merger-and-acquisition activity. Hut 8 has already got in on that action, recently buying TeraGo’s data centre business for $30 million.

As Hut 8 stock expands, so too will its Bitcoin holdings. The company currently holds about 5,520 Bitcoin as of the most recent data. It’s the number one holder of self-mined Bitcoin in North America. Right now offers it a huge opportunity to expand, making it highly valuable for long-term believers in cryptocurrency’s future.

Now what?

If you’re one of those believers, it looks like now could be the time to get back in on Hut 8 stock. Even at today’s share price appreciation, analysts recommend it as a “buy.” They’ve put in a target price of $18.25, giving it a potential upside of 134% as of writing.

As some miners have said, right now looks like it’s the first inning of a long game. If that’s the case, now is an excellent time to pick up Hut 8 before it hits another home run.

The post Why Hut 8 Mining Jumped 13% on Wednesday appeared first on The Motley Fool Canada.

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Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool owns and recommends Bitcoin.