Hut 8’s Strategic Spin-Off: American Bitcoin’s Path to Public Markets Through Gryphon Digital Merger

In a landmark move reshaping the Bitcoin mining landscape, Hut 8 Corp. (NASDAQ: HUT) has positioned its subsidiary American Bitcoin for a Nasdaq listing through a strategic reverse merger with Gryphon Digital Mining (NASDAQ: GRYP). The transaction, announced May 12, 2025, creates a pure-play Bitcoin mining entity controlling 61,000 ASIC miners with plans to reach 50+ exahash/second (EH/s) capacity at industry-leading efficiency below 15 joules/terahash (J/TH)[9][12]. This corporate restructuring unlocks $1.2 billion in combined enterprise value while maintaining Hut 8 shareholders’ exposure to Bitcoin’s upside through an 80% retained stake[11][14].

Transaction Architecture and Strategic Rationale

Deal Structure Mechanics

The stock-for-stock merger values American Bitcoin at $980 million, with Gryphon shareholders receiving 2% equity in the combined entity[9][13]. Hut 8 maintains operational control through:

• Exclusive 10-year colocation agreements at Hut 8 facilities
• Right of first refusal on future infrastructure expansions
• Cross-licensing of proprietary immersion cooling technology[12][14]

Leadership and Governance

The new entity retains Hut 8 CEO Asher Genoot as board chairman while installing Eric Trump as Chief Strategy Officer[11][14]. This leadership blend combines Genoot’s operational expertise from navigating multiple Bitcoin halving cycles with Trump’s political connections and access to distressed energy assets[12][15].

Market Implications and Competitive Landscape

The merger creates North America’s second-largest public miner by hash rate, trailing only Riot Platforms. However, American Bitcoin’s 14.8 J/TH fleet efficiency positions it 23% ahead of industry averages[12][15]. This technical edge enables:

• $65/TWh energy cost advantage versus competitors
• 45% higher profit margins at current Bitcoin prices
• Faster breakeven thresholds during market downturns[9][13]

Financial Engineering and Shareholder Value

Hut 8’s 80% retained stake creates a leveraged Bitcoin play, where every $1,000 BTC price increase generates:

• $42 million annualized EBITDA for American Bitcoin
• $18 million net income attribution to Hut 8
• 9% ROIC improvement across Hut 8’s infrastructure portfolio[10][14]

Regulatory Considerations and Risk Factors

While the Trump affiliation provides political capital, it introduces unique regulatory risks:

• SEC scrutiny of related-party transactions
• Potential CFTC classification as “strategic commodity reserve”
• DOJ anti-trust review of vertical integration[14][15]

Forward-Looking Analysis

Management guidance suggests the spin-off could unlock $450 million in growth capital through 2026, funding:

• Acquisition of 4 Canadian gas plants (310MW capacity)
• Deployment of 3nm ASIC chips in Q4 2025
• Strategic Bitcoin reserve target of 25,000 BTC by 2027[3][12]