Tether, the company behind the world’s largest stablecoin USDT, has increased its investment in Bitcoin mining company Bitdeer. In April, it raised approximately $32 million in equity funding. This shift marks Tether’s increasing appetite for the Bitcoin mining industry, despite challenging market headwinds for many Bitcoin mining companies. Despite the drop in share prices this year, the investment keeps rolling in for Bitdeer. Even other big mining companies are feeling the crunch.
Tether's Growing Interest in Bitcoin Mining
This is not the first time Tether has invested in Bitdeer, having made its original investment last year before upping its stake to 21% in March. This sustained capital deployment is a signal of Tether’s long-term strategic focus on the Bitcoin mining sector. Tether isn’t done with Bitdeer just yet. This expansion follows Bitdeer’s plummeting share price, which has declined close to 67% year-to-date. Even with this downturn, Tether appears sure of the long-term potential of Bitcoin mining and Bitdeer’s stature within this space.
USDT's Market Position and Scrutiny
Tether is the operator of USDT, the largest and most widely-used stablecoin and the third-largest cryptocurrency by market capitalization, just behind Ethereum. USDT is a digital representation of fiat currency that operates on multiple blockchains. It’s by far the most-traded crypto token by daily volume. Tether and USDT have come under fire before for lack of transparency over what exactly backs its stablecoin. After a two-year investigation, Tether chose to cease operations in New York. The NY state attorney general’s investigation into Tether found that the company had misled customers about what backed their stablecoin. In response, Tether has pointed to quarterly attestations and transparency reports as proof that its crypto is backed as claimed and is working with a Big Four accounting firm to get independently audited.
Market Conditions for Bitcoin Mining Companies
Tether’s commitment to Bitdeer coincides with a tumultuous time for Bitcoin mining operations. Even the share price of MARA Holdings, the biggest of these miners by market capitalization, is down 26% year-to-date. This downturn is indicative of the increased volatility in the market. In fact, it actually questions Bitcoin mining profitability in light of volatile crypto markets and an increase in energy prices. Despite these challenges, Tether's investment in Bitdeer suggests a belief in the resilience and future growth of the Bitcoin mining industry.
