- Bloomberg reported that Tether is investing $500 million to enter Bitcoin mining.
- The $87 billion stablecoin operator has large coffers that could make it a significant competitor in the sector.
- Tether will build its own Bitcoin mining facilities and also take stakes in existing companies.
Tether, the company that issued the largest US dollar stablecoin, aims to become a Bitcoin miner and plans to invest $500 million to establish itself as a major player, Bloomberg reported on Thursday.
Incoming CEO Paolo Ardoino said in an interview with Bloomberg that over the next six months, the company plans to invest in the region by building out its own mining facilities as well as taking stakes in existing companies.
“We are committed to being a part of the Bitcoin mining ecosystem,” he said. “When it comes to expansion, new substations and building new sites, we are taking them extremely seriously.”
Tether’s primary business is running the USDT stablecoin, which maintains a one-to-one match with the dollar. The company generates revenue through the management of assets in its multi-billion dollar reserves, and according to Bloomberg, it has about $3.2 billion of excess cash as of September.
Ardoino said Tether is building bitcoin mines in El Salvador, Uruguay and Paraguay. Ultimately, he said, the company aims to grow its share of the total computing power to run the Bitcoin network to 1%. Ardoino said Tether will reach 120 MW in operation by the end of 2023 and 450 MW by the end of 2025.
Meanwhile, the largest public Bitcoin mining company, Marathon Digital Holdings, contributes about 4%.
Bitcoin miners are largely cash-strapped and facing liquidity problems, and Tether’s deep treasury could enable it to disrupt the industry and emerge as a significant player. Nevertheless, headwinds remain as competition is fierce and mining revenues could be impacted in the event of a Bitcoin halving next year.
“For us, mining is something we have to learn and grow with over time,” Ardoino told Bloomberg. “We are in no rush to become the biggest miner in the world.”
Tether did not respond to a request for further comment.
Bitcoin has gained more than 120% in 2023. On Thursday it remained around $36,570.
Source: markets.businessinsider.com
