In January 2023, during the World Economic Forum’s (WEF) annual conference in Davos, Switzerland, Jaime Leverton, CEO of Hut 8, a crypto mining entity that trades as a public company, sat down with me for a fireside chat at the Crypto Summit on the Promenade. Leverton outlined some of her views on the recent shakeout in the cryptocurrency market and reflected on how Bitcoin (BTC) mining fares during the current turbulent period for the industry.
Throughout 2021 and 2022, the crypto industry experienced significant growth, followed by bear market struggles, bankruptcies and job cuts. Leverton took on the position of leading Hut 8 Mining as CEO a little over two years ago and experienced those ups and downs from the front line.
“Obviously, all of us in crypto have experienced the volatility,” Leverton said when asked about her thoughts on the last couple of years while leading Hut 8 through the crypto industry’s ups and downs. “I think the mining industry, in particular, has gone through some pretty big swings in the last two years,” she added, noting that “2022 was really the perfect storm from a Bitcoin mining industry perspective.” She continued:
“We had record-high hash rate, languishing Bitcoin price and energy crisis, which came quickly on the back of one of the biggest bull markets we’ve seen for the crypto mining industry in particular. We saw more than 20 new mining companies go public. At the peak, we had close to 40 publicly-traded Bitcoin mining companies in North America alone.”
A pioneer in the Bitcoin mining sector as far as public entities go, Hut 8 hit the Canadian market in 2018 and subsequently the Nasdaq in 2022, Leverton noted. The 2021 crypto bull run attracted sizable capital inflows to digital asset mining, which increased leverage, according to the Hut 8 CEO.
“Then you couple that with the perfect storm that I referenced happened in 2022 — the industry has really been shaken up, and people that took on a lot of leverage we’ve seen struggle, and so we’re now in a period of starting to see some consolidation in the space, we’re starting to see more companies just start to diversify their portfolios, something that we at Hut did — we started to do in the bull market as well.”
Later in the interview, Leverton discussed what Bitcoin mining aims to deliver. “I think the most fascinating conversation that we need to be having around Bitcoin mining is actually the promise of it,” adding:
“The beautiful thing about Bitcoin mining — I was a founding member of the Bitcoin Mining Council, and we actually released our latest report earlier this week, which shows the energy use by the Bitcoin industry by the blockchain is 58.9% renewably sourced now and that continues to improve quarter over quarter.”
The 58.9% figure comes from a report detailing 2022 Q4 survey results from the Bitcoin Mining Council, released in January 2023. Energy usage has been a debated topic in the crypto space, with Tesla CEO Elon Musk expressing interest in the subject. One argument from cybersecurity engineer Michel Khazzaka is that the mainstream banking world dwarfs Bitcoin in terms of energy usage, as per a different Cointelegraph interview.
“Where the excitement comes for me and for our space is how Bitcoin mining can really push the envelope around innovation and investment in renewables in a truly significant way,” Leverton said, adding:
“We saw just an explosion of Bitcoin miners starting to use waste methane, flare gas, landfills to generate energy and to keep that carbon from being released into the atmosphere.”
According to Leverton: “The beauty of a Bitcoin mine is it doesn’t need to be connected to transmission lines, so you can actually mine Bitcoin directly where waste energy is being created.” She noted that miners are starting to develop in rural communities in Africa and added that they resolved to self-funding, which is “the most exciting thing that’s happening in the mining space in 2023 and 2024.”