Hut 8’s (HUT) new subsidiary, American Bitcoin Corp., a partnership between the mining company and the Trump family, could be spun out, allowing the company to focus on data center hosting, broker Clear Street said in a report Monday.

The broker noted that the new unit will be included in the bitcoin miner’s financials, but the “businesses could be separated, allowing HUT to focus on high-margin data center hosting revenue.”

Hut 8 is expected to secure more power and expand its data center hosting business, the report said, and the “potential to secure a hyperscaler” is a key catalyst for the company.

Eric Trump and Donald Trump Jr. are merging their firm, American Data Centers, with American Bitcoin, a new mining venture, taking a 20% stake in the company. The remaining 80% will be owned by Hut 8, which is contributing almost 61,000 mining machines to the new entity.

Core Scientific’s (CORZ) deal with cloud computing firm CoreWeave led to a re-rating of the sector last year, as investors warmed to the idea of bitcoin miners pivoting to artificial intelligence and high performance computing (HPC).

Hut 8 is projected to enter a phase of considerable growth, starting in the second half of the year, “driven by the energization of the BITMAIN Colocation agreement,” the report added.

Clear Street has a buy rating on Hut 8 shares with a $23 price target. The shares were over 4% higher at $12.10 in early trading.

Investment bank KBW noted that Eric Trump will serve as the chief strategy officer of American Bitcoin, which could be a large positive given his “commitment to the industry as well as his obvious relationships.”

KBW has an outperform rating on the stock with a $30 price target.

Hut 8 Corp. has launched American Bitcoin Corp, a majority-owned subsidiary designed to focus on industrial-scale Bitcoin mining and reserve development. This move follows the crypto mining company’s strategic decision to contribute nearly all of its ASIC miners to American Data Centers, Inc. in return for a majority stake in the company.

The company, initially backed by investors like Eric Trump and Donald Trump Jr., was later rebranded as American Bitcoin after the transaction.

American Bitcoin Corp

According to an official press release, all Bitcoin mining operations once categorized under Hut 8’s Compute segment will now be handled under the American Bitcoin brand but remain within the same segment. Initially, American Bitcoin’s results will be consolidated into the crypto mining company’s financial reports.

Hut 8 will become American Bitcoin’s exclusive infrastructure and operations partner and will aim to generate steady revenue through long-term contracts in Hut 8’s Power and Digital Infrastructure sectors. Meanwhile, American Bitcoin plans to become the largest and most efficient Bitcoin miner globally while also focusing on creating a strategic Bitcoin reserve.

Commenting on the development, Eric Trump, Co-founder of American Bitcoin, said,

“It is a great honor to partner with Hut 8, a recognized leader in the Bitcoin space, as we launch American Bitcoin. By combining Hut 8’s proven operational excellence in data centers with our shared passion for Bitcoin and decentralized finance, we are poised to strengthen our foundation and drive significant future growth.”

The board of directors will have four members: Mike Ho, Asher Genoot, Justin Mateen, and Michael Broukhim. The mining company said that it will provide exclusive ASIC colocation and managed services to American Bitcoin, as well as day-to-day management through a shared services agreement.

Trump Family’s Crypto Expansion

The latest development comes after Eric Trump recently joined Metaplanet’s Strategic Board of Advisors.

Besides, Donald Trump’s push to make the US a prominent player in the crypto industry is gaining traction through the family’s ongoing initiatives in the crypto industry.

Apart from American Bitcoin, they have also launched World Liberty Financial (WLF), which has invested $85 million in cryptocurrencies since its founding. WLF is now looking into introducing a stablecoin.

Several members of US President Donald Trump’s family are backing a new venture to launch what aims to become the world’s largest Bitcoin mining firm.

Hut 8, a digital asset mining and infrastructure company, announced on March 31 that it is acquiring a majority stake in American Bitcoin, formerly known as American Data Center. The firm was founded by a group of investors, including Trump’s sons, Donald Trump Jr. and Eric Trump.

Related: Bitcoin miner Hut 8 argues to toss ‘short and distort’ shareholder suit

As part of the deal, American Bitcoin will take ownership of Hut 8’s Bitcoin (BTC) mining hardware. Donald Trump Jr. said that the entrepreneurs behind American Data Centers have backed their conviction in Bitcoin personally and through business.

The new venture “aims to become the world’s largest, most efficient pure-play Bitcoin miner while building a robust strategic Bitcoin reserve.” Mining operations will remain under Hut 8’s compute segment but will operate through the American Bitcoin brand.

“Mining it on favorable economics opens an even bigger opportunity. We’re excited to bring investors into that equation through a platform engineered to execute on this thesis and deliver real, tangible participation in Bitcoin’s growth.”

The Trump family bets on crypto

US President Donald Trump is strongly pushing for policy favorable to the crypto industry as his family and companies continue to bet on it. Last week, he pardoned three co-founders of crypto exchange BitMEX who previously pleaded guilty to federal money laundering charges.

The United States Treasury recently also dropped decentralized crypto mixer Tornado Cash from its sanction lists, invalidating related legal proceedings. The United States Securities and Exchange Commission (SEC) also recently declared that memecoins are not securities and the

Related: Hut 8 tips 66% hashrate boost after deal to buy 31K Bitcoin miners

Strategic shift for Hut 8

Hut 8 CEO Asher Genoot recognized the launch of American Bitcoin as a “pivotal evolution” in the firm‘s strategy. He said that separating the mining business from the rest of the corporate activities would allow it to raise its own capital and “align each segment of the business with its respective cost of capital.” He added:

“It evolves Hut 8 toward more predictable, financeable, lower-cost-of-capital segments and establishes American Bitcoin as a pure-play mining platform built for exahash growth, Bitcoin production, and operating leverage.”

The report follows Hut 8 surpassing $1 billion worth of Bitcoin holdings after acquiring 990 BTC for $100 million at the end of 2024. At the time, the company’s total Bitcoin mining stood at 10,096 BTC acquired at an average price of $24,484 per Bitcoin.

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This is a developing story, and further information will be added as it becomes available.