Fidelity, a digital asset management firm, holds over 10% of the recently-listed Canadian firms, Hut8, according to reports from TheBlock. The former's, which is also invests in Bitcoin mining, investment in Hut8, aims at increasing its hash rate with the purchase of new MicroBT and Whatsminer mining equipment.
In an official filing by Hut8 – an alternative monthly reporting (AMR) – to Canadian top securities authority, Ontario Securities Commission (OSC), on Friday, disclosing Fidelity Investments holds 10.6% of shares in the company in a mix of common shares and common share purchase warrants. AMR is filed by Canadian companies to disclose their institutional investment partners.
Welcoming a new investor in the company through an underwritten public offering on June 25 forced the filing of the AMR. The total offering is 5,750,456 units, with each unit representing one common share and one common share purchase warrant. Each Hut8 unit in the round costs $1.45, bringing the total raised in the firm to $8.34 million.
The statement released on Fidelity Investments purchase reads:
“Fidelity holds 8,396,138 Common Shares and 2,054,956 common share purchase warrants, as a result of which Fidelity deemed to hold 10,451,094 Common Shares representing approximately 10.58% of the outstanding shares of that class.”
This raise is aiming to better Fidelity's Bitcoin mining hash rates with part of the investment set to purchase new mining equipment, including MicroBT's, Whatsminer M30S, M31S, and M31S+.
Fidelity Investments in Bitcoin
The latest partnership is significant to Fidelity as it aims to expand its cryptocurrency operations. The asset management company, which holds over seven trillion in AUM, opened a new entity in London at the tail end of 2019 to help institutions onboard Bitcoin as assets.
Notwithstanding, in January this year, the company released a job listing looking for a Bitcoin mining engineer in a bid to boost operations.
On the other hand, Hut8 is struggling to make profits since launch as the Canadian mining firm witnessed a third successive drop in revenues at the end of Q2 2020.