- Tether is investing $500 million to enter bitcoin mining, Bloomberg reported.
- The $87 billion stablecoin operator has large coffers that could make it a significant competitor in the space.
- Tether will construct its own bitcoin mining facilities and also take stakes in existing companies.
Tether, the issuer of the largest US dollar stablecoin, is aiming to become a bitcoin miner, and it’s planning to invest $500 million to establish itself as a major player, Bloomberg reported on Thursday.
Over the next six months, the company plans to invest in the space building its own mining facilities as well as taking stakes in existing firms, incoming CEO Paolo Ardoino said in an interview with Bloomberg.
“We are committed to being part of the Bitcoin mining ecosystem,” he said. “When it comes to the expansions, building new substations and 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 managing assets in its multi-billion dollar reserves, and per Bloomberg, it has about $3.2 billion in excess cash as of September.
Ardoino said Tether is building bitcoin mines in El Salvador, Uruguay, and Paraguay. Eventually, the company aims to expand its share of the total computing power to run the bitcoin network to 1%, he said. By the end of 2023, Ardoino said Tether will reach up to 120 megawatts across its own operations, and 450 megawatts by the end of 2025.
Meanwhile, the largest public bitcoin mining company, Marathon Digital Holdings, contributes about 4%.
Bitcoin miners broadly have been cash-strapped and facing liquidity issues, and Tether’s deep coffers could enable it to disrupt the industry and emerge as a significant player. Even so, headwinds remain as competition is tight and mining revenue could take a hit in next year’s bitcoin halving event.
“Mining for us is something that we have to learn and grow over time,” Ardoino told Bloomberg. “We are not in a rush to become the biggest miner in the world.”
Tether did not respond to a request for further comment.
Bitcoin has notched more than 120% gain in 2023. On Thursday, it hovered around $36,570.
