Bitdeer’s Complete BTC Liquidation

In its most recent report, Bitdeer revealed that its ‘pure holdings,’ excluding customer deposits, have entirely diminished to zero Bitcoin (BTC). During the last week, Bitdeer produced 189.8 BTC and sold the entire amount. Moreover, the company liquidated an additional 943.1 BTC from its treasury reserves.

Previously, in February, Bitdeer reported holding 943.1 BTC, having sold 179.9 BTC out of 183.4 BTC mined that week. While mining companies often sell a portion of production to cover operational expenses such as electricity and equipment costs, they typically maintain a treasury for Bitcoin price exposure. A complete liquidation of reserves is less common.

Impact on Bitdeer’s Market Position

This decision coincides with Bitdeer’s recent announcement to raise $300 million via a convertible senior note offering, with an option to extend the sale by an additional $45 million. The notes, due in 2032, can convert into company stock, cash, or both. The capital will fund data center expansion, AI cloud growth, mining hardware development, and other corporate necessities.

Bitdeer’s shares experienced a notable decline following this announcement, reflecting market concerns over its strategic changes. Founded by Bitmain’s former co-founder Jihan Wu, Bitdeer is also broadening its self-mining operations, increasingly using its own rigs instead of selling them to customers.

Industry Shift Towards AI and Cloud Services

In a broader industry trend, mining firms are pivoting towards artificial intelligence (AI) and cloud services. Recently, MARA Holdings acquired a majority stake in French computing infrastructure firm Exaion. This move highlights a strategic shift to diversify revenue amidst tighter margins post-2024 halving.

Several companies, including HIVE, Hut 8, TeraWulf, and IREN, are repurposing their facilities for data-center use, while firms like CoreWeave have fully transitioned into AI infrastructure providers. These developments mark a significant evolution in the cryptocurrency mining landscape.

As the industry adapts to changing market dynamics, Bitdeer and its peers are exploring new avenues to maintain profitability and growth.

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Nevertheless, Bitdeer’s Q1 net income exceeded $400 million, primarily powered by gains on convertible notes and warrants given to stablecoin issuer Tether in 2024. This revenue plunge comes amidst Bitcoin miners’ expanding pursuits beyond Bitcoin mining and a shift towards supplying high-performance computing (HPC) for AI applications.

“As we expand self-mining and progress on our ASIC [mining hardware] roadmap, we are also forwarding plans for U.S.-based HPC and AI infrastructure,” stated Matt Kong, Bitdeer’s Chief Business Officer.

Despite these efforts, Bitcoin miners face challenges adapting post-Bitcoin network’s April 2024 halving event, which halved mining revenue. Bitdeer is countering dwindling mining revenue by selling its in-house, energy-efficient Bitcoin mining hardware. However, sales are yet to compensate for the mining income loss.

The company is augmenting self-mining activities, utilizing mining hardware to amass Bitcoin. Bitdeer anticipates its self-mining hashrate will reach 40 exahashes per second (EH/s) by the close of 2025, as revealed in its earnings release. Hashrate is an indicator of the computational power safeguarding the Bitcoin network.

“With our SEALMINER mining rigs swiftly coming off the production line and abundant global power capacity available, we expect to see swift growth in our self-mining hashrate,” Kong added.

As of March, Tether held a 21% stake in Bitdeer, according to US regulatory filings. Bitdeer is reportedly investing in its US expansion to hedge against potential trade wars escalation.

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