Tether Makes Major Move Into Bitcoin Mining With $100 Million Investment In This Firm

In a significant development, Tether, the issuer of the widely used stablecoin USDT, has acquired a $100 million stake in Bitdeer Technologies Group, a US-listed Bitcoin miner owned by Chinese billionaire Jihan Wu. 

Notably, the deal includes an option for Tether to purchase an additional $50 million shares within a year, strengthening its position in the Bitcoin mining sector.

Tether’s Multi-Million Dollar Stake In Bitdeer

According to Bloomberg, the subscription agreement between Tether and Bitdeer involved a private placement of 18.6 million Class A ordinary shares, generating $100 million in gross proceeds. 

Additionally, a warrant allows Tether to acquire up to five million additional shares at $10 per share. The private placement concluded on Thursday, with Cantor Fitzgerald & Co. acting as the placement agent.

Bitdeer stated that the funds from the agreement will support the expansion of its data center operations, the development of application-specific integrated circuit (ASIC) based crypto mining equipment, and other general corporate purposes. However, details regarding the percentage of Bitdeer held by Tether under the agreement were not disclosed. 

This agreement represents a significant step for Tether in its goal to become a major player in Bitcoin mining. Last year, the company began constructing its own mining facilities in Uruguay, Paraguay, and El Salvador, pledging to invest $500 million within six months. 

Bitdeer’s Market Rebound

Bitdeer, headquartered in Singapore, is among the largest publicly-listed crypto miners in the United States, with a market capitalization of approximately $670 million. The company operates data centers in the United States, Norway, and Bhutan. 

Following the news of the agreement, Bitdeer’s shares, which had declined by over 40% this year, rose by around 6.5% to $6.20.

Earlier this year, Bitdeer was reportedly in discussions with private credit firms to secure approximately $100 million in financing. Whether these discussions will continue following Tether’s capital injection into the company remains unclear.

Bitcoin mining involves the operation of power-intensive computers that secure the blockchain and earn new tokens as a reward. In April, the rewards were halved as part of a programmed network upgrade known as “The Halving,” which occurs every four years. This change effectively reduced the profitability of Bitcoin mining by approximately half.

In contrast, BTC’s price hit a record high of $73,700 in March, driven by optimism surrounding the launch of spot Bitcoin exchange-traded funds (ETFs) in the United States. As of this writing, the largest cryptocurrency is trading at $67,150, down more than 3% in the past 24 hours. 

Featured image from Shutterstock, chart from TradingView.com