Tether acquires $100 million stake in Bitcoin miner Bitdeer

Stablecoin issuer Tether has acquired a $100 million stake in Bitdeer Technologies Group, the US-listed Bitcoin mining firm owned by Chinese billionaire Jihan Wu. The agreement includes an option for Tether to acquire an additional $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, generating $100 million in gross proceeds, as announced by Bitdeer on Friday. The deal also includes a warrant for Tether to buy up to five million additional shares at $10 per share. Cantor Fitzgerald & Co. acted as the placement agent, with the private placement closing on Thursday.

Bitdeer plans to use the proceeds to fund the expansion of its data centers and the development of ASIC-based mining rigs. Following the announcement, shares of Bitdeer rose over 4% to $6.08 in pre-market trading.

Tether, issuer of the world’s largest stablecoin, USDT, recently reorganized into four divisions to reflect its broader interest in the crypto economy. One of these divisions focuses on investments in Bitcoin mining.

Bitdeer’s Chief Business Officer Linghui Kong stated that Tether’s investment “demonstrates confidence in our vision and the strength of our extensive global operations.” Tether CEO Paolo Ardoino added, “We anticipate close collaboration with Bitdeer across several key infrastructure areas moving forward.”

The deal follows Bitdeer’s announcement two months ago about the successful test of its home-designed Bitcoin mining chip, the SEAL01. According to Bitdeer, this chip enhances mining performance while reducing power consumption, resulting in lower operating costs and a smaller environmental footprint for miners.

Tether CEO Paolo Ardoino was in the news earlier this month when he publicly responded to Ripple CEO Brad Garlinghouse’s comments regarding potential U.S. government actions against them.

Garlinghouse recently suggested on a podcast that the U.S. government is targeting Tether, sparking concerns of a looming regulatory crackdown.

Ardoino criticized Garlinghouse on X for spreading “fear about USDT” and called his remarks hypocritical, especially since Ripple itself is currently under investigation by the U.S. Securities and Exchange Commission (SEC). He pointed out that Ripple is also planning to launch its own stablecoin in 2024, which could compete with Tether’s USDT.

In his defense of Tether, Ardoino highlighted USDT’s robust market presence, noting its widespread use across the globe and its particular impact in banking users in developing economies.

Garlinghouse’s comments were interpreted as a strategic move ahead of Ripple’s planned stablecoin launch. Earlier in April, the blockchain firm Ripple announced its own foray into the $150 billion stablecoin market by launching a digital currency pegged to the U.S. dollar.

XRP-sister stablecoin will maintain a 1-to-1 backing with a corresponding value of U.S. dollar deposits, government bonds, and cash equivalents that Ripple has in reserve.