Bitcoin miners may be struggling as the price of the biggest cryptocurrency by market value trades sideways, and investors sell off their equity—but stablecoin giant Tether is betting big on one of the sector’s largest players, purchasing about $32 million in equity in publicly traded Bitdeer in April.
An SEC filing shows Tether snapped up the shares as the price of Bitdeer’s stock dropped. Tether did not immediately respond to Decrypt’s questions, but the company has increased its interest in the Bitcoin mining space: The company bought a stake in Bitdeer last year, and in March, filings showed that it had increased its stake in the company to 21%.
The stablecoin company said Monday that it would support Bitcoin mining pool Ocean, too, by providing it with hash rate to help mine blocks and reap the BTC rewards.
Nasdaq-listed Bitdeer (BTDR) finished the day trading at $7.62 a share, down nearly 67% year-to-date and part of an industry-wide swoon that’s come as Bitcoin has lost momentum and mining difficulty has soared, making it difficult for miners to recover their costs.
The share price of MARA Holdings, the largest miner by market capitalization, is off 26% so far this year, while fellow large miner Riot Platforms is down over 38%.
Last week, miners quickly offloaded Bitcoin in frantic selling, likely to raise funds, data from CryptoQuant showed.
Bitcoin was recently changing hands at about $85,000, up nearly 7% over the past week but well off its record high near $109,000 set in January.
Tether is the company behind USDT, a digital token that runs on a number of blockchains. USDT is the biggest stablecoin, the third-largest cryptocurrency in terms of market cap, and often the most-traded crypto token by daily volume.
As a stablecoin, it’s backed by dollars, treasuries, and other investments, so the value of the cryptocurrency can be used like fiat currency—mainly so traders can enter and exit trades without using a bank.
Tether has had legal problems, though. In February 2021, the company agreed to no longer do business in New York after a two-year state attorney general investigation found it had “made false statements about the backing” of its stablecoin.
Still, Tether has pointed to quarterly attestations and transparency reports as proof its crypto is backed as claimed. The firm also confirmed to Decrypt that it is working with a Big Four accounting firm to get independently audited.
Edited by James Rubin
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