Published
5 months ago on
November 17, 2023
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In a significant move, the issuer of the world’s largest stablecoin, Tether, plans to make significant inroads into the Bitcoin (BTC) mining space with a significant investment of $500 million.
Tether hopes to realize its ambitions of reaching 1% of Bitcoin mining computing power under new CEO Paolo Ardoino.
Tether Eyes Bitcoin Mining Space
Tether is planning to push into Bitcoin mining under new CEO Paolo Ardoino, who is set to take over soon. According to Ardoino, the issuer of the world’s largest stablecoin plans to spend a staggering $500 million in the next six months to facilitate the construction of mining facilities and make investments in other miners. Ardoino further added that the company plans to build mining facilities in Paraguay, Uruguay, and El Salvador, as it looks to grow its computing power to 1% of the total Bitcoin mining network. The new sites will have a capacity of anywhere between 40 and 70 megawatts (MW).
The investment also includes a $610 million debt financing facility extended to German miner Northern Data Group. Tether announced this credit line at the beginning of the month, and it is available to be drawn throughout 2024. Ardoino stated at the time,
“It will be covered using the company’s profits and will not be part of Tether’s stablecoin consolidated reserves and, in fact, done via a separate investment vehicle under the Tether Group to have proper segregation.”
This loan was in line with a pattern of rising loans issued by Tether. The company also made a strategic investment in Northern Data Group in September, looking to back artificial intelligence initiatives. In its report, the company noted that its assets included $5.5 billion worth of loans. These were up from $5.3 billion during the previous quarter.
Tether Plans To Reach 450 MW By 2025
While talking about establishing mining operations in Uruguay, Paraguay, and El Salvador, Ardoino added that Tether plans to increase its total contribution to the total computing power of the Bitcoin network to 1%. However, he did not specify a timeline for achieving this target. Tether also plans to expand its direct mining operations to 120 megawatts by the end of 2023 and aims to reach 450 megawatts by the end of 2025. The company added it has set aside around $150 million, which will be used
Additionally, Tether is considering a 300-megawatt facility and is also setting up its facilities inside containers that can be moved around when electricity prices change or see a considerable surge.
“Mining for us is something that we have to learn and grow over time. We are not in a rush to become the biggest miner in the world.”
With major players such as BlackRock and Fidelity filing applications for a spot Bitcoin ETF, institutional interest in the world’s largest cryptocurrency is surging. Tether aims to take advantage of this interest and expand into Bitcoin mining. Ardoino is set to become Tether’s CEO in December. According to an announcement made in October, he will also retain his position as the Chief Technical Officer at parent company Bitfinex.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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