What happened?
Despite a sharp stock market recovery, the shares of Hut 8 Mining (TSX:HUT)(NASDAQ:HUT) fell sharply on the TSX today. HUT stock price hit a day low of around $10.18 per share — down nearly 15% for the day and touching its lowest level since September 30. While the stock staged a recovery later during the session, it was still highly volatile.
So what?
Hut 8 Mining is a Toronto-based financial technology firm with its primary focus on Bitcoin mining. It currently has a market cap of nearly $2 billion, which makes it one of the biggest crypto stocks on the TSX right now.
Hut 8’s shares have fallen sharply in the last five sessions, as it has seen nearly 30% value erosion during this period. A recent massive decline in Bitcoin prices is one of the main reasons for these massive losses in HUT stock price.
On December 2, the cryptocurrency miner revealed that it mined 265 Bitcoin in November with an average production rate of 8.83 Bitcoin per day. This monthly Bitcoin mining rate was lower than more than 300 Bitcoin per month it mined in Q3 2021. This could be another reason hurting investors’ confidence lately and pressuring the stock.
Now what?
While its November month mining rate hasn’t been able to impress investors, Hut 8 Mining is continuing to focus on strengthening its mining infrastructure. Its long-term earnings and profitability growth outlook remain strong.
At the end of November, the company had about 5,242 Bitcoin in its reserve. A recovery in Bitcoin prices in the near term could help Hut 8 Mining stock rally. That’s why long-term investors who are looking for exposure to the crypto market might want to buy HUT stock on the dip. Despite its recent big losses, it’s still trading with more than 200% year-to-date gains.
