Managing crypto market cycles with Jamie Leverton from HUT8

[Music] i am delighted to be joined by jamie leverton the ceo of hut 8. how are you doing today i am fantastic it's great to be here well we're lucky to come over and uh hang out with the toronto crowd it's our first time so oh welcome yeah yeah i'm pleased to be here we've done the seattle we've done montreal and a bunch of other places around this area but usually we're london-based so it's always good to go out and stretch our legs indeed well welcome but folks who maybe aren't familiar with hutate and what you folks do do tell us what you're all about yeah absolutely so hot 8 started originally as a one of the oldest and largest publicly traded bitcoin mining companies um back in 2000 early 2018 and we've evolved uh quite significantly over the last number of years uh we we still mine bitcoin as well as ethereum but we've also purchased a data center

business so we have five data centers across canada two in toronto two in vancouver one in kelowna that supports 400 enterprise customers and we're building out some really unique uh products and services to cater to the web 3 burgeoning ecosystem so when folks come to you and they're looking for your services i imagine it's a little bit more complex complicated than hey could you mind some bitcoin for me what's the kind of thing that they're actually asking you to provide and what do you provide yeah we quite often particularly since we purchased the the data center business which has co-location cloud managed service offerings in it uh we'll get people calling asking if they can host bitcoin servers in our in our data centers which is just something that you can't do you would never run the type of compute that's used to mine bitcoin in a traditional data center environment and they're we have three mining sites but they're really purpose-built to mine bitcoin they don't do anything else and

and we don't intermix our data center business with our bitcoin mining business gotcha now you mentioned that you know you've been around since 2018 which i guess in the bitcoin world is a lifetime it is indeed still a very nascent sector and one that's uh you know can be volatile at times we've noticed a bit of a downturn of late and naturally that can lead to a lot of doom saying from people how do you folks ensure that you see this as kind of an opportunity or something that can be you know turn into something positive rather than negative how do you react to it yeah i we uh having been around for a number of market cycles now in the crypto space as a company we really focused last year during the bull market on preparing our strategy so that it uh it was well equipped should market conditions change which obviously they now have and so we do have a diversified business model we have a very large amount of bitcoin on our balance sheet a very robust balance sheet and and

this market we're actually really excited about because it allows us to uh to focus on building the products and and services that that we are in the data center space so it actually it's a a bear market provides a great opportunity to focus on on the foundation on building on getting ready for the for the next hectic market cycle and we we were lucky enough to put the right pieces in place that we have great work that we can focus on right now what's the most common misconception you think people have about not just your services but the market in general like because from an outsider's perspective we can people can get the idea of like oh it's digital currency like maybe your your parents or your folks can get ahead their heads around that but when people start talking about you know nfts and these in in some cases living nfts we've been speaking to people here which is a level above it can all sound a little bit like abstract you know they see a board ape figure is that what i don't know what this even is like how do you first of all explain that stuff to

people in a way that is understandable and accessible and makes sense and then how do you make them see the value in what it is that you offer yeah i think it really you kind of have to start at the beginning if you if you enter the crypto space at the metaverse level and you haven't yet understood the foundation of bitcoin or blockchain and i think it's important to take it take it all the way down and and teach them about how bitcoin was born what bitcoin solves for how bitcoin's different from the other many types of cryptocurrencies or or blockchain projects out there and then when we get into to the nft space we're really talking about digital property rights which i think would still very very early days of where that industry is ultimately going to evolve to and i think i think it's it's will continue to be a huge area of investment and focus in the technology space going forward it's really the next generation of the internet that's being built right now

what's the most common mistake that you see within your sector when maybe without naming names obviously but i'm sure you've seen people who maybe haven't been able to survive the downturn perhaps as well as you guys have so what's the what's the mistake which you've been able to avoid i guess well historically we see um people deploying capital at the wrong time of the market cycle so really deploying capital at kind of peak pricing and and then when the market conditions change they can they can struggle with with the debt or the the the follow-on capital requirements which is uh something that we are not struggling with again having lived through cycles we take a very conservative balance sheet first approach to how we run our business and we we do have we're the only um the only company in our space that has a diversified business model where we actually have a data center business that isn't correlated to to bitcoin directly and we're really focusing on on building out a completely different suite of

offerings from anyone else in our space and in the world well it's a comparatively nascent sector to a lot of other ones and talking about trends is tough because they can be it's not kind of a six-month cycle it's a week-long cycle or something like that but in terms of trends that are going on at the moment or the plans that you have or initiatives to roll out for the next six or 12 months what is exciting you at the moment what are you guys focusing on every everything that we're seeing happening in the web3 space we despite market conditions we see a ton of capital coming in really exciting projects being built out and we're super excited to to be here we're partners with enthusiast gaming who they've recently launched a blockchain game which which we are super excited to be a part of and embedded within you can actually get a headache skin in that game which has performed really well and so i think we're just getting started with the art of the possible as these worlds come together

what about the show itself you've come to like this is some of our first physical events for a while given the last two years and the circumstances are you here to talk to like potential clients are you rubbing shoulders with like people from similar companies and finding out additional info like what what's the angle yeah it's it's absolutely about finding potential new partnerships potential customers as i say our data center business is is really purpose built to support uh projects in the gaming space in the web3 space we we can get very bespoke very custom which is difficult to find uh in a in a traditional data center provider so i think there's nothing but opportunity as we as we get out into the market with uh with this new with this new data in our business well hopefully you found a few more over the last two days i'm sure we have [Music]

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