Mining company Hut 8, which is listed on the Toronto Stock Exchange, today said that it has opened a Bitcoin Yield Account with New York-based crypto trading and lending platform Genesis Global Capital. The account will offer a premium rate of interest to the users.
A new savings-like account
The new savings account will give Hut 8 access to a high rate of interest with lower risk. The firm will make an initial investment of 1,000 Bitcoin and earn a 4% rate of return on its idle Bitcoin stack. The program will permit it to redeem its borrowed coins without making a long-term commitment. It will also be allowed to decrease or increase its holdings with a one-day notice.
Miners around the world compete with each other for mining the next block in the Bitcoin network and get economic incentives. However, this industry is high competition. The global demand is also rising as the price of Bitcoin is growing rapidly. The sudden movement of Bitcoin in the past month, especially its 300% increase in 2020 has left many miners much richer. Hut 8 is also one of the beneficiaries who made a lot of money mining the blockchain.
Genesis growing its network
Jaime Leverton, the CEO of Hut 8 said,
“We are excited to be partnering with Genesis to manage our digital assets, allowing us to yield Fiat currency from the significant BTC on our balance sheet, minimize Hut 8’s Fiat expenses and subsequently expand our ability to hold Bitcoin rather than sell. Our current momentum and trajectory are just the start of what’s to come in 2021 for Hut 8 and its investors.”
The amount of interest paid to the crypto accounts depends on a wide range of factors, which can be tweaked by receiving a premium on the US dollar value of Bitcoin holdings. Genesis lends primarily to institutional borrowers like trading firms and hedge funds who are looking for arbitrage. The firm has given nearly $9 billion in loans, a majority of which is dealt with in Bitcoin and cash.