Bitrabo Editorial
Tether, the creator of the popular stablecoin USDT, has acquired a $100 million stake in Bitdeer Technologies Group, a US-based Bitcoin mining company owned by Chinese billionaire Jihan Wu, marking a significant move.
This deal also includes an option for Tether to buy an additional $50 million worth of shares within the next year, further solidifying its presence in the Bitcoin mining industry.
Tether’s Sizeable Investment in Bitdeer
According to reports from Bloomberg, Tether and Bitdeer engaged in a private placement deal involving 18.6 million Class A ordinary shares, generating $100 million in proceeds. Additionally, Tether has the option to purchase up to five million more shares at $10 per share through a warrant. The placement was facilitated by Cantor Fitzgerald & Co.
Bitdeer intends to utilize the funds from this deal to expand its data center operations, develop ASIC-based crypto mining equipment, and for general corporate purposes. The exact percentage of Bitdeer owned by Tether as part of this agreement was not disclosed.
This move signifies a significant advancement for Tether towards establishing a prominent role in the Bitcoin mining sector. In the past year, Tether initiated the construction of mining facilities in Uruguay, Paraguay, and El Salvador, committing to invest $500 million within half a year.
Bitdeer’s Market Resurgence
Headquartered in Singapore, Bitdeer is one of the largest publicly-listed crypto miners in the US, with a market capitalization of around $670 million. Operating data centers in the US, Norway, and Bhutan, Bitdeer saw a 6.5% rise in its shares to $6.20 following the announcement of this agreement, after experiencing a more than 40% decline earlier this year.
Earlier in the year, Bitdeer was reportedly in talks with private credit firms for approximately $100 million in financing. The progression of these discussions after Tether’s injection of capital into the company remains uncertain.
Bitcoin mining involves running energy-intensive computers that secure the blockchain and earn new tokens as rewards. In April, these rewards halved as part of a network upgrade called “The Halving,” which occurs every four years, decreasing the profitability of Bitcoin mining by approximately 50%.
On a different note, BTC reached a peak of $73,700 in March, driven by optimism surrounding the launch of spot Bitcoin exchange-traded funds in the US. Presently, the leading cryptocurrency is trading at $67,150, indicating a decrease of more than 3% in the last 24 hours.
Image source: Shutterstock, chart data from TradingView.com