Coatue Management, a tech-focused investment manager, is set to invest $150 million in the Bitcoin (BTC) miner, Hut 8 Corp, as part of the ongoing trend of investors capitalizing on the artificial intelligence (AI) surge.
In an announcement on June 24, Hut 8 Corp disclosed the significant investment from Coatue Management, headed by billionaire Philippe Laffont, which will be made through a convertible note.
The note, as per the Bitcoin (BTC) miner, will yield an 8% annual return with an initial five-year term. Hut 8 has the option to extend the note for up to three additional one-year periods. This investment is considered a senior unsecured obligation of Coatue Management.
Laffont expressed confidence in Hut 8, stating that they view the Bitcoin miner as being in a favorable position to expand its computational capabilities and seize any potential opportunities that may arise.
The transaction is expected to be finalized on or before July 11 of this year. On June 21, Hut 8 submitted the investment agreement with Coatue to the United States Securities and Exchange Commission.
Hut 8 is recognized as one of the largest public miners based on its available computing power, with a current market capitalization of $1.1 billion.
In the cryptocurrency sector, Hut 8 was among the early entrants into the high-performance computing sector, which is now in demand to support innovative AI models and applications.
Other crypto miners, such as Core Scientific and TeraWulf, have also ventured into hosting data centers or forming partnerships with AI firms. Following their AI-focused agreements, both companies saw an increase in their stock prices.
Robert Yin, a partner at Coatue, noted that the market is starting to recognize the scarcity of premium power assets, and Hut 8 has developed a robust portfolio of assets that are highly attractive and scalable.
Cointelegraph reached out to Hut 8 for further details on the investment.
Since the Bitcoin halving in April, many mining companies have been exploring strategies to enhance their competitiveness amidst profitability challenges.
During this period, Hut 8 expressed its intention to expand its self-mining operations and diversify its revenue streams.
In other news, the SEC has dropped its investigation into Ether but is still pursuing significant penalties from Ripple.