On January 18, Bitcoin miner Hut 8 (BTC) witnessed a more than 23% drop in its share price, reaching $7.10 in after-hours trading. The decline coincided with the release of an unverified report by activist short-selling firm JCapital Research titled ‘The Coming HUT Pump and Dump.’ The report raised concerns about Hut 8’s merger with fellow miner US Bitcoin (USBTC) on November 30, 2023, suggesting potential risks for investors due to USBTC’s alleged legal issues and undisclosed share ownership by a related party.
Hut 8 a Bitcoin miner, faces a 23% share drop due to short-seller accusations
JCapital alleges that USBTC, associated with individuals with a history of legal issues, has defaulted on a loan and incurred fines for securities violations. The report further claims that Hut 8’s Chief Strategy Officer, Michael Ho, formerly USBTC’s CEO, concealed ties with stock promoters accused of ‘pump and dump‘ schemes. Despite the unverified nature of the short report, concerns have sparked panic selling. The report concludes with the anticipation that Hut 8 shareholders may face challenges due to potential over-leveraging and inefficiency as a Bitcoin miner, especially if Bitcoin prices remain below $60,000. Cointelegraph has reached out to JCapital and Hut 8 for verification and comments on the accusations.
The shares of Bitcoin mining company Hut 8 plummet by 23% amid accusations made by short-sellers
The report coincided with Hut CEO Jaime Leverton ringing the opening bell at Nasdaq headquarters in New York. The event was stated to ‘celebrate the completion of its all-stock merger’ between Hut 8 and USBTC. In contrast to several crypto miners compelled to sell portions of their mined Bitcoin holdings amid market challenges, like Core Scientific and Riot Blockchain, Hut 8 has persisted in augmenting its self-mined Bitcoin reserves.