- Tether acquires a $100 million stake in Bitdeer Technologies, with an option for an additional $50 million.
- Investment supports Bitdeer’s data center expansion and Tether’s Bitcoin mining ambitions.
Tether Holdings Ltd., has made a significant move by acquiring a $100 million stake in Bitdeer Technologies Group. This US-listed Bitcoin mining company, owned by Chinese billionaire Jihan Wu, is now partially controlled by Tether, with an option for Tether to purchase an additional $50 million in shares within the next year. This strategic investment marks a substantial step forward for Tether in expanding its influence in the Bitcoin mining industry.
Details of the Subscription Agreement
Under the terms of the subscription agreement, the two firms agreed on a private placement of 18.6 million Class A ordinary shares, generating $100 million in gross proceeds. Additionally, there is a warrant to purchase up to five million more shares at $10 per share. This private placement, which closed on Thursday, saw Cantor Fitzgerald & Co. acting as the placement agent. The funds raised from this deal will be utilized to expand Bitdeer’s data center operations, develop ASIC-based crypto mining equipment, and cover other general corporate purposes.
Tether Ambitions in Bitcoin Mining
Tether’s acquisition of a stake in Bitdeer is part of its broader plan to become a leading Bitcoin miner. Last year, Tether began constructing its own mining facilities in Uruguay, Paraguay, and El Salvador. The British Virgin Islands-incorporated company, known for issuing the widely-used USDT cryptocurrency, announced in November its intention to spend half a billion dollars on this effort within six months. This acquisition aligns with Tether’s aggressive expansion strategy in the Bitcoin mining sector.
Tether Investment Boosts Bitdeer’s Market Position
Bitdeer Technologies Group, headquartered in Singapore, is one of the largest public crypto miners listed in the US, with a market capitalization of around $670 million. The company operates data centers in the US, Norway, and Bhutan. Following the announcement of Tether’s investment, shares of Bitdeer rose about 6.5% to $6.20, despite having slumped more than 40% earlier this year.
In March, Bitdeer was reportedly in talks with private credit firms to secure about $100 million in financing. It remains unclear if those discussions are still ongoing in light of Tether’s significant capital injection. This financial boost will undoubtedly support Bitdeer’s ongoing and future projects, enhancing its capabilities in the highly competitive Bitcoin mining industry.
The Halving and Its Implications for Bitcoin Mining
Bitcoin mining involves the operation of power-intensive computers that secure the blockchain, earning new tokens as a reward. In April, these rewards were halved as part of a scheduled upgrade to the Bitcoin network known as “the halving,” which occurs every four years. This event effectively made it about half as profitable to be a Bitcoin miner, impacting the revenue potential for companies like Bitdeer.
Market Trends and Bitcoin’s Price Surge
Despite the reduced profitability from mining, Bitcoin’s price reached a record high in March, driven by optimism surrounding newly-launched spot Bitcoin exchange-traded funds (ETFs) in the US. On Friday, Bitcoin traded up around 0.7%, reaching $68,800. This price surge underscores the robust demand for Bitcoin and the positive market sentiment, benefiting companies involved in the mining and trading of the cryptocurrency.
Conclusion
Tether Holdings Ltd.’s acquisition of a substantial stake in Bitdeer Technologies Group is a strategic move that positions Tether at the forefront of the Bitcoin mining industry. This investment not only supports Bitdeer’s expansion and technological development but also aligns with Tether’s ambitious plans to establish itself as a major Bitcoin miner. As the cryptocurrency market continues to evolve, Tether’s proactive approach and significant financial commitments highlight its determination to play a pivotal role in shaping the future of Bitcoin mining.
Disclaimer
The information provided in this article is for informational purposes only and should not be considered financial advice. The article does not offer sufficient information to make investment decisions, nor does it constitute an offer, recommendation, or solicitation to buy or sell any financial instrument. The content is opinion of the author and does not reflect any view or suggestion or any kind of advise from CryptoNewsBytes.com. The author declares he does not hold any of the above mentioned tokens or received any incentive from any company.
