Eric Trump has launched a new venture called American Bitcoin by teaming up with bitcoin mining company Hut 8 (HUT) to build what he claims will be the world’s largest bitcoin-mining business. According to a report from The Information, the Trump family and Hut 8 formed a joint partnership and plan to take the company public on the Nasdaq in the coming months. This would be the Trump family’s sixth and biggest crypto-related business so far, joining their meme coin, stablecoin, NFT trading cards, crypto wallet, and a fund that is in the works. However, the report notes that Hut 8’s history raises some red flags.
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Although the company owns bitcoin-mining sites and equipment, former employees and partners have reported serious problems. These include exploding transformers, electrical issues, mismanagement by inexperienced staff, accusations of theft, and the redirecting of power to benefit Hut 8’s own machines. In one case, local officials ordered a site shutdown after too many noise complaints, but Hut 8 staff said that they didn’t know how to safely turn off the power. Interestingly, though, Hut 8 often blames partners or rivals and claims that it does better when it runs facilities itself.
Still, this has led to multiple contract cancellations, legal disputes, and shutdowns due to construction issues and energy problems. Despite these issues, American Bitcoin was created by merging three Hut 8 facilities with Gryphon Digital Mining (GRYP), which is a struggling penny stock whose value doubled after the deal. Hut 8 now owns 80% of American Bitcoin, while the Trump family and close investors own the remaining 20%. Whether American Bitcoin succeeds will depend on Hut 8 avoiding past mistakes.
Is HUT Stock a Good Buy?
Turning to Wall Street, analysts have a Strong Buy consensus rating on HUT stock based on 13 Buys assigned in the past three months, as indicated by the graphic below. Furthermore, the average HUT price target of $24.54 per share implies 40% upside potential.
