Hut 8 Soared 8.4%, Can This Crypto Miner Sustain the Momentum?

Summary
• Hut 8 appoints Mark Mendelman as CTO of Highrise AI, a subsidiary focused on secure AI cloud infrastructure
• Earnings report on August 7th expected to show $0.15/share loss and $49.1M revenue
• Options chain sees heavy volume in August 8th $20–$22.5 strike prices with 69%–145% implied volatility

Hut 8 (HUT) surged 8.4% to $21.49, breaking out from its 50-day moving average of $18.92. The rally coincides with the appointment of a defense-tech veteran to lead its AI subsidiary and a volatile options landscape. With the stock trading at a 4.18x negative P/E and 52-week range of $8.73–$31.95, investors are weighing near-term catalysts against persistent operational losses.
AI Leadership and Sector Volatility Ignite Short-Term Optimism
Hut 8’s 8.4% intraday rally was catalyzed by two key developments: the appointment of Mark Mendelman as CTO of Highrise AI, a subsidiary building secure AI cloud infrastructure, and renewed sector-wide crypto enthusiasm. Mendelman’s defense-tech background and focus on 'bare-metal performance' align with rising demand for resilient AI infrastructure. Meanwhile, the broader Blockchain & Crypto sector showed mixed signals, with sector leader RIOT down 0.24%. However, HUT’s unique positioning in AI infrastructure and upcoming Q2 earnings report on August 7th created a short-term bullish narrative.

Blockchain & Crypto Sector Mixed as HUT Defies Peers
While Hut 8 surged, the broader Blockchain & Crypto sector showed divergence. Sector leader Riot Platforms (RIOT) declined 0.24%, reflecting caution ahead of macroeconomic data. However, HUT’s move was driven by AI infrastructure positioning rather than pure crypto mining dynamics. The appointment of a defense-tech veteran to Highrise AI differentiates HUT from peers like CleanSpark (CLSK) and Bitfarms (BITF), which are more focused on traditional Bitcoin mining.

Options Playbook: High-Volatility Contracts and ETF Alternatives
• 200-day average: $18.51 (below current price) • RSI: 27.7 (oversold) • MACD: 0.45 (bullish divergence) • Bollinger Bands: $19.79–$22.77 (trading near upper band)

With HUT breaking out from its 50-day MA and RSI in oversold territory, traders might consider a bullish bias. The HUT20250808C22 call option (strike $22, expiration 8/8) stands out with 81% implied volatility, 23.9% leverage ratio, and $36.5K turnover. For a bearish hedge, HUT20250808P21 (strike $21, 87.9% IV, $12.5K turnover) offers downside protection. A 5% upside to $22.55 would yield 173% return on the $23 call and 102% on the $21 put. Aggressive bulls may consider HUT20250808C22 into a break above $22.77, HUT’s Bollinger Band upper limit.

Backtest Hut 8 Stock Performance
The strategy of buying stocks after an 8% intraday surge has shown poor performance. The backtest results reveal a significant underperformance compared to the market, with a strategy return of -2.50% and an excess return of -88.07%. The strategy's Sharpe ratio is -0.01, indicating negative risk-adjusted returns, and the maximum drawdown is 0.00%, suggesting that the strategy has not only underperformed but also failed to provide any downside protection.

AI Momentum or Earnings Jitters? Watch This Threshold
Hut 8’s 8.4% surge reflects optimism around its AI infrastructure ambitions, but the stock remains below its 52-week high of $31.95. With earnings on August 7th and key resistance at $22.77 (Bollinger Band upper), investors should monitor whether the move sustains. For now, the HUT20250808C22 call offers high leverage for a continued rally, while sector leader RIOT (-0.24%) suggests broader caution. Watch for a close above $22.77 to validate the breakout.