Tether Holdings, the stablecoin issuer, has acquired a
substantial stake in Bitdeer Technologies Group, a US-listed Bitcoin mining
company owned by Chinese billionaire Jihan Wu. This acquisition involves a
US$100 million investment, with an option to purchase an additional US$50
million in shares within the upcoming year.
Investment Facilitates Expansion in Mining
According to Bitdeer’s statement today (Friday), the
agreement entails a private placement of 18.6 million Class A ordinary shares,
generating US$100 million in gross proceeds. Additionally, there is a provision
for a warrant to acquire up to five million additional shares at US$10 per
share. The private placement concluded on Thursday, facilitated by Cantor
Fitzgerald as the placement agent.
The primary objective of this deal is to support Bitdeer’s
expansion plans, including the development of ASIC-based crypto mining
equipment, expansion of data centre operations, and addressing general
corporate needs. However, the specific percentage of Bitdeer now held by Tether
under this agreement remains undisclosed, as Tether has not yet responded to
requests for comment.
For Tether,
this marks a step towards its ambition to establish a presence in Bitcoin
mining. The company initiated construction of its mining facilities in Uruguay,
Paraguay, and El Salvador last year, intending to invest half a billion US
dollars within six months in this endeavour.
JUST IN‼️ – Bitdeer, Jihan Wu’s cryptocurrency mining company, is raising new capital from Tether.Tether has agreed to purchase up to $150 million worth of Bitdeer shares in a private placement. pic.twitter.com/6dpV1CZZ3n
— Swan (@Swan) May 31, 2024
Market Cap Holds Steady
Bitdeer, headquartered in Singapore, is among the largest
public crypto miners listed in the US, boasting a market capitalization of
approximately US$670 million. Despite experiencing a decline of over 40% in its
share value this year, Bitdeer’s shares witnessed a 6.5% increase, reaching
US$6.20 following the announcement.
Previously, Bitdeer was reportedly in discussions with
private credit firms to secure around US$100 million in financing, as reported
by Bloomberg News in March. It remains uncertain whether these discussions
persist following Tether’s injection into the company.
Bitcoin mining involves operating power-intensive computers
to secure the blockchain network, earning new tokens as a reward. In April,
these rewards underwent a halving as part of a programmed upgrade to the
Bitcoin network, reducing the profitability of Bitcoin mining by about half.
This article was written by Tareq Sikder at www.financemagnates.com.
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