Singapore-based cryptocurrency mining company Bitdeer Technologies Group is planning to raise $150 million through a public offering of convertible notes that will mature in 2029. The funds will be used to expand data centers and develop ASIC-based mining rigs. Investors in the notes will have the option to convert their holdings into equity or receive a combination of cash and shares. The annual interest rate on the notes is set at 8.5%, providing investors with a steady return until maturity, conversion, redemption, or repurchase.
Bitdeer, currently ranked as the 11th largest crypto mining firm by market capitalization, is valued at approximately $870 million. However, following the announcement of the convertible notes offering, the company’s stock price fell by over 18%. Over a 5-day period, the stock has dropped by 23%. This trend mirrors a similar offering from Core Scientific, another crypto mining firm, which saw its stock price drop by 10% after announcing a $400 million senior convertible notes offering. The current market conditions are challenging for Bitcoin miners, with profits diminishing amidst a sell-off in the Bitcoin market.
Bitcoin miners are facing a critical phase known as “capitulation,” where they may reduce operations or sell a portion of their mined Bitcoin to sustain their operations or hedge their exposure. A significant indicator of capitulation is the decline in Bitcoin’s hashrate, which represents the total computational power securing the Bitcoin network. Despite these challenges, Bitcoin miners are becoming attractive partners for AI data centers, benefiting from their power supplies and operational capabilities. Recent AI deals, like Core Scientific’s agreement with CoreWeave and Coatue Management’s investment in Hut 8, are catalysts for the sector.
Analysts at Bernstein initiated coverage of miner Iris Energy with an outperform rating and a $26 price target. They also initiated coverage of Core Scientific with an outperform rating and a $17 objective. Bitcoin miners currently control around 6 gigawatts of power access, with a projected pipeline of up to 12 gigawatts by 2027. This significant power capacity positions miners favorably in the large load power interconnect queue, enabling potential partners to secure energy supplies more efficiently. Bitcoin data centers are well-suited for retrofitting due to their high power density racks, robust cooling infrastructure, and operational capabilities.
Overall, the cryptocurrency mining sector is facing challenges such as diminishing profits and market volatility. Despite this, companies like Bitdeer Technologies Group are seeking capital through convertible notes offerings to expand operations and develop new technologies. The current trend of miner capitulation and declining Bitcoin hashrate is impacting the profitability of miners, prompting them to seek alternative revenue streams. Partnering with AI data centers and leveraging their power supplies may provide new opportunities for Bitcoin miners to navigate the evolving market landscape. Analysts are closely monitoring the sector, providing ratings and price targets for companies in the space.
