In a notable move, Tether, the issuer of the popular stablecoin USDT, has invested $100 million in Bitdeer Technologies Group, a US-listed Bitcoin miner owned by Chinese billionaire Jihan Wu. The deal also includes the option for Tether to acquire an extra $50 million worth of shares within the next year, further solidifying its foothold in the Bitcoin mining industry.
Tether's Extensive Investment in Bitdeer
As per Bloomberg, 18.6 million Class A ordinary shares were privately placed as part of the subscription agreement between Tether and Bitdeer, yielding a gross revenues of $100 million.
A warrant also enables Tether to purchase an additional five million shares at a price of $10 each. Thursday marked the completion of the private placement, for which Cantor Fitzgerald & Co. served as the placement agent.
According to Bitdeer, the agreement's proceeds will go toward general business objectives, the development of application-specific integrated circuit (ASIC) based cryptocurrency mining equipment, and the growth of its data center activities. Nevertheless, information about Tether's share in Bitdeer under the terms of the arrangement was not made public.
This agreement marks a significant advancement for Tether as it aims to establish itself as a major player in Bitcoin mining.
Last year, the company initiated the construction of its mining facilities in Uruguay, Paraguay, and El Salvador, committing to invest $500 million within six months.
Bitdeer, headquartered in Singapore, ranks among the largest publicly-listed crypto miners in the US, boasting a market capitalization of roughly $670 million. Operating data centers in the US, Norway, and Bhutan, Bitdeer witnessed a market rebound following the announcement, with its shares rising by approximately 6.5% to $6.20, having experienced a decline of over 40% earlier this year.
Earlier in the year, Bitdeer was reportedly in talks with private credit firms to secure around $100 million in financing. The status of these discussions post-Tether's capital infusion into the company remains uncertain.
Bitcoin mining entails operating power-intensive computers to secure the blockchain and earn new tokens. April saw a reduction in rewards, halving profitability due to a programmed network upgrade known as "The Halving," occurring every four years.
In contrast, BTC reached a record high of $73,700 in March, buoyed by optimism surrounding the launch of spot Bitcoin ETFs in the US. Currently, the largest cryptocurrency is trading at $67,150, reflecting a decrease of over 3% in the past 24 hours.
June 2024, Cryptoniteuae