The headline said $7 billion in cash. The 10-Q says $233 million unrestricted. A 96.7% gap is not a rounding error; it's a structural fact that should change how every stakeholder prices Hut 8 Corp.
The data shows this first: Hut 8 reported roughly $7 billion in cash and cash equivalents as of June 30. But only $233.6 million of that total is unrestricted and available for general corporate purposes. The remaining $6.8 billion is locked in restricted accounts designated for two AI data center subsidiaries — River Bend DC LLC, which issued $3.25 billion in notes, and Beacon Point DC LLC, which issued $4.25 billion in notes. Total subsidiary-level debt: $7.5 billion.
Let me be precise about what this structure means. The consolidated balance sheet shows the cash, but the debt terms show the truth. River Bend's notes are due May 2028; Beacon Point's notes are due May 2030. Interest payments do not begin until November 2026. Proceeds sit in construction reserve and debt service reserve accounts — that is standard project finance, not a war chest. The parent company, Hut 8 Corp, is not a guarantor on either facility.
We trace the hash to find the human error. And the error here is on the market's side: analysts and momentum funds treated a special-purpose vehicle's project financing as if it were parent-level liquidity. That is a category mistake with consequences.
Now the uncomfortable arithmetic. Q2 adjusted EBITDA came in at positive $10.4 million. Q2 interest expense: $51.2 million. That works out to an interest coverage ratio of roughly 0.2x — the core mining business generates about one-fifth of what it needs to service current debt obligations. First-half operating cash flow was negative $32.8 million. The company is structurally burning cash before its AI projects produce a single dollar of revenue.
And here is what the AI narrative is missing: there are no confirmed AI customers in the filing. No hyperscaler contract. No megawatt target for either facility. No construction milestones. What the 10-Q does show: 17,316 Bitcoin held across the consolidated group. Of those, 3,090 coins are pledged to purchase mining machines, and 4,850 coins are posted as collateral. That collateral supports a $200 million FalconX loan at 7% interest, due April 2027.
The liquidation math is the detail most analyses skip. If roughly 4,850 BTC backs that $200 million loan, the loan-to-value sits in the 40-50% band at current prices. A 130% maintenance threshold places the forced-collateral zone near $52,000-$65,000 Bitcoin. Below that zone, Hut 8 must either post additional Bitcoin or face a margin call — and the digital asset impairment that flows through fair value accounting, $138.6 million in Q2 alone, amplifies the pain.
The market corrects; the data endures. Based on my audit work — from the 2017 ICO contract protocols to the 2020 DeFi yield standardization — the rule never changes: restricted money is not free cash. HUT traded like that $7 billion was deployment ammunition. It is not. It is ring-fenced, pre-committed project finance.
Here is the contrarian read. This structure is not uniformly bearish. The SPV isolation means the AI projects cannot drag the parent into insolvency if construction fails; the notes are non-recourse to Hut 8 Corp. And the very fact that Hut 8 secured $7.5 billion in project financing at 6.13%-6.19% without a parent guarantee suggests meaningful counterparty diligence. I assess a medium probability that River Bend and Beacon Point already have soft commitments or serious hyperscaler discussions underway. The projects are early — but they are financed.
Watch three things in the next two quarters. First, Bitcoin's position relative to the $52,000-$65,000 collateral threshold. Second, any construction milestone or customer announcement from River Bend or Beacon Point. Third, whether the FalconX loan gets refinanced or extended before April 2027. The Q3 cash flow statement will tell you more than any AI narrative ever will. The market corrects; the data endures.