Tether Acquires $100 Million Stake in US-Listed Bitcoin Miner Bitdeer

(Bloomberg) — Stablecoin issuer Tether Holdings Ltd. acquired a $100 million stake in U.S.-listed Bitcoin miner Bitdeer Technologies Group, owned by Chinese billionaire Jihan Wu, with an option to purchase an additional $50 million in shares within a year.

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The two firms signed a subscription agreement for a private placement of 18.6 million Class A common shares, generating gross proceeds of $100 million, Bitdeer said Friday. There was also a warrant to purchase up to five million additional shares at $10 per share. The private placement closed on Thursday. Cantor Fitzgerald & Co. served as placement representative.

Bitdeer said the deal will fund the expansion of Bitdeer’s data center operations, the development of ASIC-based crypto mining equipment and other general corporate purposes. The companies did not disclose what percentage of Bitdeer belonged to Tether within the scope of the agreement. Tether did not immediately respond to a request for comment.

The deal marks a major step forward in Tether’s plan to become a major Bitcoin miner, as it began building its own mining facilities in Uruguay, Paraguay and El Salvador last year. The British Virgin Islands-based company, which issues USDT, the world’s most used cryptocurrency, announced in November that it planned to spend half a billion dollars on the effort within six months.

Read More: Largest Stablecoin Firm Tether Becomes a Major Bitcoin Miner

Bitdeer is one of the largest publicly traded crypto miners listed in the US, with a market cap of approximately $670 million. Headquartered in Singapore, Bitdeer has data centers in the USA, Norway and Bhutan. Bitdeer shares, which have lost more than 40% of their value this year, rose about 6.5% to $6.20.

Bitdeer had previously been in talks with private lending firms to arrange about $100 million in financing, Bloomberg News reported in March. It was unclear whether these discussions would continue after Tether’s injection.

Read More: Crypto Miner Bitdeer In Talks With Private Loan For Capital

Bitcoin mining involves power-hungry computers securing the blockchain and earning new tokens as rewards. In April, these rewards were halved as part of a programmed upgrade called “halving” that occurs every four years in the Bitcoin network. Essentially, this change made Bitcoin mining profitable by half.

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Conversely, Bitcoin’s price reached a record high in March, driven in part by optimism about newly launched spot Bitcoin exchange-traded funds in the US. Bitcoin traded at $68,800 on Friday, up around 0.7%.

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