Bitdeer Secures $150 Million in Funding, Tether Eyes Bitcoin Mining Expansion

June 1, 2024 · Crypto News, TGbot · Source:NewCoinSpot

Stablecoin issuer Tether has acquired $100 million worth of shares in Bitdeer Technologies Group, a U.S.-listed Bitcoin mining company owned by Chinese billionaire Jihan Wu.

Key Points:

  • Investment Details: The transaction includes an option for Tether to purchase an additional $50 million in shares within a year, further solidifying its position in the Bitcoin mining sector.
  • Subscription Agreement: According to Bloomberg, the subscription agreement between Tether and Bitdeer involves a private placement of 18.6 million Class A common shares, generating $100 million in total proceeds. Additionally, warrants allow Tether to buy up to 5 million more shares at $10 per share. The private placement concluded on Thursday.
  • Use of Funds: Bitdeer plans to use the funds to expand its data center operations, develop ASIC-based crypto mining equipment, and cover other general corporate purposes. However, details about Tether’s exact shareholding percentage in Bitdeer were not disclosed.

Strategic Move:
This agreement marks a significant step for Tether toward becoming a major player in Bitcoin mining. Last year, the company began constructing its own mining facilities in Uruguay, Paraguay, and El Salvador, committing to invest $500 million over six months.

Bitdeer’s Profile:
Headquartered in Singapore, Bitdeer is one of the largest publicly traded cryptocurrency miners in the U.S., with a market capitalization of approximately $670 million. The company operates data centers in the U.S., Norway, and Bhutan. Following the announcement, Bitdeer’s stock price rose by about 6.5% to $6.20, although its stock has fallen over 40% this year.

Earlier this year, Bitdeer was reportedly in talks with private credit firms to secure around $100 million in financing. It remains unclear if these negotiations will continue following Tether’s investment.

Bitcoin Mining Challenges:
Bitcoin mining requires high-energy-consuming computers to secure the blockchain and earn new tokens as rewards. In April, Bitcoin rewards underwent a halving event, effectively reducing mining profitability by half.

Market Context:
Despite the profitability challenges, Bitcoin prices soared to an all-time high of $73,700 in March, fueled by optimism over the U.S. launch of a Bitcoin spot ETF. As of this writing, Bitcoin is trading at $67,150, down over 3% in the past 24 hours.

Conclusion:
Tether’s significant investment in Bitdeer and its option to purchase more shares underscore its ambition to become a key participant in the Bitcoin mining industry. This move, combined with its ongoing efforts to build mining facilities in Latin America, reflects Tether’s strategic focus on leveraging the growing crypto mining market. The expansion and technological advancements funded by this investment will likely play a crucial role in shaping the future landscape of Bitcoin mining.