Tether Holdings Ltd. is making a giant stride towards becoming one of the largest Bitcoin miners in the world, as the stablecoin company gets set to invest $500 million in the sector within the next six months.
The $87 billion stablecoin firm is planning a colossal entry into Bitcoin mining, according to incoming CEO Paolo Ardoino, stating that the stablecoin company may spend about $500 million within the next six months, constructing mining facilities and taking stakes in existing mining companies.
“We are committed to being part of the Bitcoin mining ecosystem,” said Ardoino. “When it comes to the expansions, building new substations and new sites, we are taking them extremely seriously.”
Continuing in his interview with Bloomberg, Ardoino said the company would build mining facilities in South America (Paraguay, Uruguay, and El Salvador) in a bid to beef up its mining power to 1% of the Bitcoin mining network. These new mining facilities are projected to supply between 40 and 70 MW (megawatts) of energy.
This investment into BTC mining includes part of a $610 million credit facility that Tether had extended to Frankfurt-based Bitcoin mining company Northern Data AG earlier this month after acquiring shares in the firm back in September. This strategic investment in Northern Data was to assist them in enhancing their generative artificial intelligence cloud service, expanding their portfolio of data centers, and scaling Bitcoin mining operations.
This venture is the advent of a shift from Tether’s major business – running the USDT stablecoin that keeps a 1:1 value with the dollar by leveraging a cash and cash-equivalent asset reserve. With the entrance of a company of its reputation and financial capability into the BTC mining sector, its finite USDT supply is sure to enjoy higher competition and utility, as well as diversify profit pipelines.
According to Ardoino, Tether plans to boost its direct mining operations to 120 megawatts by the end of 2023 and hit a target of 450 megawatts by the end of 2025. The firm also looks to build a 300-MW facility and is putting up its facilities in containers that are moveable when electricity prices fluctuate.
“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,” added Ardoino.
While Tether targets to land a computing power of 1% in the Bitcoin network, Ardoino wasn’t specific about the timeframe for that goal. However, if Tether runs a 1% computing power in the network, it will get to rub shoulders with Marathon Digital Holdings, the largest public BTC mining company, contributing around 4% to the network.
Karan Melerud, chief executive at MinerMetrics, a Bitcoin mining data and research firm, believes a 1% market share would set Tether among the world’s top 20 Bitcoin mining companies.
“Given Tether’s importance in the crypto ecosystem and its financial muscle, its market share over time will likely grow far beyond its initial 1% goal,” said Melerud.