Tether acquires US$100 million stake in US listed Bitcoin miner Bitdeer
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Published Fri, May 31, 2024 · 10:30 PM
STABLECOIN issuer Tether Holdings has acquired a US$100 million stake in Bitdeer Technologies Group, the US-listed Bitcoin miner owned by Chinese billionaire Jihan Wu, with the option to purchase an additional US$50 million in shares within a year.
The two firms entered into a subscription agreement for a private placement of 18.6 million Class A ordinary shares, Bitdeer said in a statement on Friday (May 31), which generated US$100 million in gross proceeds. There was also a warrant to purchase up to five million additional shares at US$10 per share. The private placement closed on Thursday. Cantor Fitzgerald . acted as the placement agent.
The deal will fund an expansion of Bitdeer’s data centre operations, the development of ASIC-based crypto mining equipment, and other general corporate purposes, Bitdeer said. The companies did not reveal how much of Bitdeer Tether currently owns as per the agreement. Tether didn’t immediately respond to a request for comment.
The agreement marks a major step forward for Tether in its plan to become a major Bitcoin miner, having begun construction of its own mining facilities in Uruguay, Paraguay, and El Salvador last year. The British Virgin Islands-incorporated company, which issues the world’s most used cryptocurrency, USDT, said in November that it planned to spend half a billion US dollars within six months on the effort.
Bitdeer is one of the largest public crypto miners listed in the US, with a market capitalization of around US$670 million. Headquartered in Singapore, Bitdeer has data centers in the US, Norway, and Bhutan. Shares of Bitdeer, which had slumped more than 40 percent this year, rose about 6.5 percent to US$6.20.
Bitdeer was previously in talks with private credit firms to arrange about US$100 million in financing, Bloomberg News reported in March. It was unclear if those discussions would remain ongoing following Tether’s injection.
Bitcoin mining involves the operation of power-hungry computers that secure the blockchain, earning new tokens as a reward. In April, these rewards were halved as part of a programmed upgrade to the Bitcoin network called “the halving,” which occurs every four years. In essence, the change made it about half as profitable to be a Bitcoin miner.
Conversely, Bitcoin’s price reached a record high in March, driven in part by optimism surrounding newly-launched spot Bitcoin exchange-traded funds in the US. Bitcoin traded up around 0.7 percent at US$68,800 on Friday.
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