Singapore-based cryptocurrency mining firm Bitdeer Technologies Group has unveiled plans to raise $150 million through a public offering of convertible notes, scheduled to mature in 2029. The company aims to use the funds to expand its data centers and enhance the development of ASIC-based mining rigs, according to a Thursday press release.
Details of the Offering and Investor Options
The convertible notes will be senior unsecured obligations, giving them priority over other debts if the company faces financial issues. Investors in the notes will have the option to convert their holdings into Bitdeer’s Class A ordinary shares or receive a combination of cash and shares. The notes will carry an annual interest rate of 8.5%, providing investors with a consistent return until they mature or are converted, redeemed, or repurchased.
Despite its strong market position—Bitdeer ranks as the 11th largest crypto mining firm by market capitalization at approximately $870 million—the announcement of the public offering led to an immediate decline in the company’s stock price. Shares fell by more than 18%, continuing a broader 5-day downward trend that saw the stock drop 23%, from $8.26 on August 9 to $6.33 by August 16, according to Google Finance.
Challenges in the Crypto Mining Industry
Bitdeer’s decision to issue convertible notes mirrors a similar move by Core Scientific, another crypto mining firm that recently announced a $400 million senior convertible notes offering, which also resulted in a 10% drop in its stock price.
The announcement comes at a time when Bitcoin miners are experiencing a phase of “capitulation” due to diminishing profits amid a recent Bitcoin market sell-off. This has led some miners to scale back operations or sell portions of their mined Bitcoin to sustain their businesses. A key indicator of this capitulation is the decline in Bitcoin’s hashrate, reflecting the total computational power securing the Bitcoin network.
The Future of Bitcoin Mining and AI Integration
Despite the current challenges, Bitcoin miners are emerging as attractive partners for the construction of artificial intelligence (AI) data centers, thanks to their substantial power supplies and operational expertise. Recent deals, such as Core Scientific’s 12-year agreement with CoreWeave and a $150 million investment in Hut 8 by Coatue Management, highlight the potential for collaboration between crypto mining and AI sectors.
Broker Bernstein recently initiated coverage of miner Iris Energy with an outperform rating and a $26 price target, as well as Core Scientific with an outperform rating and a $17 target. According to Bernstein, Bitcoin miners currently control around 6 gigawatts (GW) of power access, with a potential pipeline of up to 12 GW by 2027. This power capacity positions miners favorably in the “large load power interconnect queue,” enabling them to save time in securing energy supplies and making their data centers well-suited for retrofitting to support AI infrastructure.
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