Tether Throws Hat in Ring with $100 Million Bitdeer Investment

Friday, 31/05/2024 | 15:34 GMT by Tareq Sikder

The investment includes an option for an additional $50 million in shares within a year.

The ownership percentage remains undisclosed, with Bitdeer's share value increasing by 6.5% post-announcement.

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.

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.