Hut 8 Expands Bitcoin-Backed Credit Facility With Coinbase to $200M

Hut 8 has increased the borrowing capacity on its bitcoin-backed credit facility with Coinbase Credit, lifting the total principal cap to $200 million and drawing the newly available funds in full.

According to Hut 8’s filing on Wednesday, the amended and restated agreement, executed on Dec. 22, raises the maximum loan size by $70 million from the prior cap under the third amended facility.

Hut 8 said the additional borrowing was taken immediately and will be used for general corporate purposes. The loan is secured by bitcoin held with Coinbase Custody Trust Company, with Coinbase’s recourse limited to the pledged collateral.

The revised agreement leaves most economic terms unchanged, including maturity and repayment provisions. In its third-quarter Form 10-Q, Hut 8 disclosed that it had $130 million outstanding under the Coinbase facility, carrying an interest rate of about 9%.

Under the amended credit agreement, the applicable interest rate depends on the amendment period. Prior to the third amendment, the rate was tied to the federal funds rate with a floor of 3.25% plus an applicable margin. From the third amendment effective date through final maturity — including the newly upsized fourth amendment — interest accrues at the contractually defined “Base Spread.”

While the filing does not restate the Base Spread numerically, Hut 8’s Q3 disclosures imply a rate in the high single digits. Based on the reported 9% interest expense on the outstanding balance, the all-in borrowing cost under the fourth amended facility appears to be roughly around that level, absent major changes in benchmark rates or margin terms.

The expanded credit line gives Hut 8 additional liquidity backed by its bitcoin holdings at a time when miners have increasingly leaned on external financing to fund capital spending as the operating margins from bitcoin mining remain thin.